Digital currencies are a revolutionary tool that central banks should consider, but they remain far too risky to be used as legal tender any time soon, according to the Bank for International Settlements.
"General-purpose central-bank digital currencies could revolutionize the way money is provided and the role of central banks in the financial system, but these are uncharted waters", said Benoit Coeure, a European Central Bank board member who chairs the BIS Committee on Payments and Market Infrastructures.
"Any steps towards the possible launch of a CBDC should be subject to careful and thorough consideration".
The report looks at the possible impact of a "wholesale" digital currency only for a limited audience like banks and a "retail" version for all.
"General goal central bank digital currencies could revolutionize the way money is provided and the role of central banks in the financial system", said Coeure. It carries out its work through its meetings, programs and through the Basel Process - hosting worldwide groups pursuing global financial stability and facilitating their interaction. However, it could challenge the two-tier banking system and exacerbate any financial crisis as depositors seek havens for their cash.
It said last month its study would not be finalized until late next year, later than initially indicated. "DLT is where the action is", said Coeure, an European Central Bank executive board member.
Using blockchain technology for "fully reliable, real-time payments" is a "more immediate priority" Carney added.
The report was released ahead of the G20 summit in Buenos Aires on March 19-20, where cryptocurrencies will be one of the major themes addressed.
Last month United States regulators joined a growing chorus of officials saying they may need new powers to regulate cryptocurrencies.
"Investor protection along with anti-money laundering and terrorist financing safeguards are the priority, while consideration of cryptocurrencies' underlying and futures markets would come later, Coeure said".
"So any discussion in the G20 next week will be likely to be forward looking, discussing the pros and cons of regulation, but don't expect concrete action, it's more about comparing experiences so far", Coeure said.