There's a long way to go before the U.S. government starts regulating bitcoin, Rob Joyce, special assistant to the president and White House cybersecurity coordinator, told CNBC on Friday.

Speaking at the Munich Security Conference in Germany, Joyce emphasized the need to better understand the cryptocurrency's risks and benefits before embarking on any sort of regulatory regime.

"I think we're still absolutely studying and understanding what the good ideas and bad ideas in that space are," he said when asked about the potential for government regulation. "So, I don't think it's close."

Bitcoin is a decentralized cryptocurrency, meaning that unlike fiat currencies such as the dollar, it's not backed by a central authority. Critics have said that this gives the currency, which saw huge price gains in 2017, no inherent value.

As transactions are completely anonymous, bitcoin has been accused of making it easier for those engaged in illicit activities to hide their money.

"We are worried. There are benefits to the bitcoin concept — digital cash, digital currencies," Joyce said. "But at the same time, if you look at the way bitcoin works after there is a criminal act that takes place, you can't rewind the clock and take back that currency."

Joyce described the inherent problem with this lack of a trail, noting that in the case of credit card theft, for instance, individuals or companies can contact their banks and purchases can be undone and the cash retrieved.