The world's top central banking body has said that the creation of crypto-currencies, such as bitcoin, by central banks could revolutionise the global financial system.
But the Bank for International Settlements says such a move would also carry significant fraud risks and expose banking centres to a greater risk of cyber attacks.
The BIS, known as the central bankers' central bank, is calling for "robust mitigation methods" before central bankers consider offering official digital currencies.
"The potential effect of fraud could be more significant because of the ease with which large amounts could be transferred electronically," the BIS reported.
"Central bank digital currencies could help make settling trades of securities and foreign exchange more efficient in the future," said Benoit Coeure, chair of the Committee on Payments and Market Infrastructures, part of BIS.
"But more work and experimentation would be needed to explore these benefits."
The report says digital currencies could change the way money is offered, strengthen payment systems, and be a reliable method to carry out transactions if the use of cash decreases.
But it warns that the currencies carry significant risks and are too volatile at the moment to be considered as a common means for payment or savings.
"General purpose central bank digital currencies could revolutionise the way money is provided and the role of central banks in the financial system," said Mr Coeure.
"But these are uncharted waters, with potential risks. This report is a starting point for further discussion and research and will help countries make choices given their own circumstances."
The report was released ahead of the G20 summit in Buenos Aires on March 19-20, where crypto-currencies will be one of the major themes addressed.
Last month, US regulators joined a growing chorus of officials saying they may need new powers to regulate crypto-currencies.