The Bank of England believes electronic currencies like Bitcoin could fundamentally change the payments industry across the world.

According to The Telegraph, the bank has been analysing cryptocurrencies and the results are now part of its One Bank Research Agenda. One of the main conclusions unveiled is that Bitcoin has the power to revolutionise the way Britons pay for goods and services, comparing the arrival of digital money to the advent of the Internet.

The Bank of England believes cryptocurrencies “potentially combined with mobile technology, may reshape the mechanisms for making secure payments”.

The emergence of private digital currencies (such as Bitcoin) has shown that it is possible to transfer value securely without a trusted third party. 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. This raises the question of whether central banks should themselves make use of such technology to issue digital currencies.