Bank of England deputy governor Ben Broadbent has voiced concerns that a switch to digital currencies could negatively affect banks.

A digital version of the pound sterling, in particular, could impact on commercial banking business models and "impair" their ability to issue loans.

Broadbent, who is responsible for the Bank of England's monetary policy, told the London School of Economics: "If bank lending became scarcer, or more expensive, it’s likely that investment and economic activity would suffer.

"Taking deposits away from banks could impair their ability to make the loans in the first place,” he continued. "Banks would be more reliant on wholesale markets, a source of funding that didn’t prove particularly stable during the crisis, and could reduce their lending."

The Bank of England has been one of the most progressive financial institutions when it comes to exploring digital currency possibilities. Broadbent noted that they had a "lot more thinking to do" on the topic.

Despite this, he argued that they won't be replacing the likes of the euro, pound or dollar any time soon:

"Almost always, these currency substitutions occur only once the existing currency has become deeply compromised. Even then, the thing people naturally reach for is an existing, trusted currency - often the US dollar - rather than some entirely new unit of account."