This study explores the transformative role of Artificial Intelligence (AI) in advancing digital currency and promoting financial inclusion within the Indian economic landscape. With the rapid evolution of fintech and the introduction of the Central Bank Digital Currency (CBDC) such as the e-Rupee by the Reserve Bank of India, AI technologies have emerged as critical enablers of secure, efficient, and accessible financial services. The paper examines how AI applications ranging from predictive analytics and fraud detection to intelligent customer service and credit scoring are enhancing the adoption and functionality of digital financial systems. It also assesses the impact of these innovations on underserved populations, including rural and unbanked communities, thereby contributing to inclusive economic growth. Drawing on current trends, policy frameworks, and case studies, this analytical study offers insights into the opportunities and challenges of integrating AI into India’s digital financial infrastructure. The findings highlight the potential of AI to bridge financial gaps, foster trust, and accelerate the digital transformation of the Indian financial ecosystem.