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Its view contrasts with the Riksbank in neighboring Sweden,
which said last year it may become the first big central bank to
create its own digital money as the use of cash declines.
"(A) central bank digital currency would present challenges to
financial stability and would not provide any new opportunities
for monetary policy," the Danish central bank said in a
statement.
"In a Danish context, it is unclear what central bank digital
currency would be able to contribute that is not already covered
by the current payment solutions."
Digital currencies allow users to make online transactions
across borders instantaneously and have surged in popularity
this year because of their eye-watering price rises. Bitcoin,
the best-known, has increased in price by more than 1,700
percent since the start of the year.
Decentralized digital currencies like bitcoin are still not
widely accepted, however, and critics say they can easily be
used for money laundering and that the fact that they are
unregulated makes them risky to use -- hence the idea of an "e-"
version of a physical currency that still has a central
controlling authority.
Danes use cash in 23 percent of in-store buys compared to an
average of 79 percent in euro zone countries.
Issuing e-crowns would also make the central bank a retail bank
for households and businesses and make the central bank a
"direct competitor to the commercial banks", it said.
Denmark is home to Scandinavia's largest payments service
provider Nets <NETS.CO> which is in the process of being taken
over by U.S. private equity firm Hellman & Friedman.
The Bank of England is also looking at the merits of introducing
a digital currency for use by businesses and households.
The Bank for International Settlements (BIS) said in September
it was too soon to determine whether central banks should issue
their own cryptocurrencies, as the risks could not yet be fully
assessed and the technology underpinning them is still unproven.
(Reporting by Stine Jacobsen; Additional reporting by Jemima
Kelly; Editing by Catherine Evans)
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