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CALGARY — The Bank of Canada is considering the merits and risks of digital currencies as interest in cryptocurrencies like Bitcoin reaches a fevered pitch.

In a research paper released by the central bank Thursday, report authors Walter Engert and Ben Fung said there are merits to creating a central bank digital currency as society starts to move away from cash, and the bank’s potential to reap profits off issuing that cash could be threatened.

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The staff discussion paper, which doesn’t necessarily reflect the views of the bank, said a central bank digital currency (CBDC) could become a cheaper alternative to debit and credit cards and other forms of payment, making it easier for competition to emerge in the retail and large-value payment sectors.

“With no transaction fees charged by the central bank, the benchmark CBDC would probably be less expensive for merchants than cash and credit cards.”