A ledger for stocks?

The BoE says that, since the majority of financial assets such as shares or bonds already exist only as digital records, distributed ledgers could possibly transform the financial system.

"It may be possible in the future in theory, at least for the existing infrastructure of the financial system to be gradually replaced by a variety of distributed systems," the BoE said, although it made no predictions that this would happen.

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"This development could allow any type of financial asset, for example shares in a company, to be recorded on a distributed ledger. Distributed ledger technology could also be applied to physical assets where no centralized register exists, such as gold or silver."

Regulation eyed

Bitcoin is the most popular of the "virtual" currencies which allow users to exchange online credits for goods and services. While there is no central bank that issues them, bitcoins can be created online by using a computer to complete difficult tasks, a process known as mining. Some 13 million bitcoins are believed to be in circulation, with a cap of 21 million meaning no more bitcoins can be created after that point.

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In New York, regulators are currently weighing up a raft of new rules to regulate bitcoin and other virtual currencies. In China, the central bank has been busy warning people of the risks associated with holding bitcoin and online exchanges have been hit with a number of regulatory issues.

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BoE: Bitcoin could transform stock markets