Digital transformation in banking over the years of the regime has fundamentally changed the structure of financial tradition and the way banks manage their balance sheets. Digitalization of banking services can bring important messages for bank liquidity by improving operations, reducing transaction costs, and providing financial services. The main objective of this study is to examine the impact of digitalization of banks on liquidity in the Iranian banking system. For this purpose, panel data of Iranian public and private banks during the period 1392 to 1402 were used and dynamic panel economic modeling was applied. The results of empirical research show that liquidity in Iranian banks shows a dynamic nature and is significant in its past. More importantly, digitalization of banks has a negative and significant effect on liquidity, which indicates the reducing role of digital transformation in the vulnerability of banks' liquidity. The researcher's research suggests that digitalization, when combined with bank risk management, can help improve the stability and efficiency of Iran's banking system. The results have important implications for monetary policymakers, banking supervisors, and bank managers in developing digital banking and maintaining financial stability.