Bank of England: Digital currencies could transform payment system

Digital currencies and mobile technology together may revolutionise the payment system, according to a latest research report published by the Bank of England.

Mark Carney, the Bank's Governor, summarised the launch of the One Bank Research Agenda saying, "Economies are complex, dynamic and constantly evolving systems that are underpinned by social interactions and behavioural change, shaped by fundamental forces like technology and globalisation and supported - or at times disrupted - by finance."

The latest view proposed on digital currency in the agenda is in complete contrast to the central bank's initial stance about the inability of bitcoin to function on a broader level.

"While existing private digital currencies have economic flaws which make them volatile, the distributed ledger technology that their payment systems rely on may have considerable promise", the report said.

The report comes at a time when the prospect of countries launching their own cryptocurrencies has gained attention in recent weeks and the publication has triggered debates on social networking sites.

Yanis Varoufakis, Greece's Finance Minister previously commented that "the technology of bitcoin, if suitably adapted, can be employed profitably in the eurozone as a weapon against deflation".