Digital currencies do not currently pose a material risk to monetary or financial stability in the U.K., the Bank of England said in its quarterly bulletin. But the bank believes the technology behind digtial currencies can reshape the region's financial system.

"Digital currencies do not, at present, play a substantial role as money in society," the institution wrote in the report. "But they may have the potential to come to exhibit at least some of the functions of money over time. There is little incentive for the pricing of goods and services to change from traditional currencies, however, unless these currencies were to suffer from a wholesale collapse in confidence."

The central bank estimated that only 20,000 consumers in the U.K. own bitcoins and about 300 transactions are made each day.