Central-bank-backed cryptocurrencies would be ironic indeed, given that Bitcoin was created as a way to circumvent the need for banks. Beyond that, the idea raises complicated questions about how such systems should be designed, built, and maintained, as well as how they could affect a country’s—or the entire planet’s—financial stability. That’s why Riksbank is hedging its bets, investigating not only distributed-ledger technology—which it describes as unproven but “progressing incredibly rapidly”—but also traditional, centralized accounting methods for its “e-krona” (pdf) project.

Some economists have argued (pdf) in recent years that a cryptocurrency tied to central-bank-backed money could give governments a way to issue digital tokens that are a lot like cash. Users of such a “FedCoin” would enjoy the level of anonymity that Bitcoin provides, goes the theory, while being protected against the volatility that has plagued cryptocurrencies. Many countries’ central banks are investigating this idea, but Sweden looks to be the furthest along.

But a cryptocurrency that’s available to all consumers “opens up a whole host of issues” and would pose new challenges for makers of monetary policy, says Rod Garratt, an economics professor at the University of California, Santa Barbara.

First, there’s the question of who, exactly, should verify the transactions and maintain the distributed ledger. Even if that’s solved, the new system would be, in a sense, too streamlined, making it easier for bank runs to occur in a moment of crisis or panic. In most current financial systems, large-scale withdrawals of funds are naturally slowed by the time it takes for a central bank to produce the paper money people are demanding. But if the currency is purely digital, no such brakes exist—a panicked citizenry could empty their accounts almost instantly, leaving an entire country’s banking system all but penniless.

A new journal article (pdf) published by the Bank of International Settlements, a kind of central bank for central banks, suggests a more straightforward approach than trying to use cryptocurrency to replace cash. In the article, Garratt and Morten Bech, a researcher at the BIS, draw an important distinction between a “retail” cryptocurrency like FedCoin and a “wholesale” one that would only be used by banks.

One important role central banks play in the global financial system is to facilitate large payments between commercial banks. Commercial banks make deposits at central banks, and when they need to send a large payment to another bank, as they might during the sale of a company or house, they can rely on a central-bank-operated payment system. The central bank handles the “clearing,” or the updating of each party’s account to reflect the new transaction, and the “settlement,” or the literal transfer of the money.