Digital currencies issued by central banks could provide a reliable alternative to the current reserve banking system , according to a report prepared for the European Parliament 's Economic and Monetary Affairs committee . It believes the current system can be a " major source of instability " , and that creating a reliable funding source could " pave the way for a more stable financial system " . The report cites guidance from the Bank for International finance , which warns of the " potentially serious implications for monetary policy " from central bank - developed digital currencies .
Digital currencies issued by central banks could provide a reliable alternative to the fractional reserve banking system, according to a report prepared for the European Parliament's Economic and Monetary Affairs Committee. It said the current system can be a "major source of instability", and that creating a reliable funding source could "pave the way for a more stable financial system". The report contradicts guidance from the Bank for International Settlements, which warns of the "potentially serious implications for monetary policy" from central bank-developed digital currencies.