The Reserve Bank believes the development of digital currencies like bitcoins do not pose a threat to the financial system.
As such, a Senate inquiry has been told the central bank believes it is unlikely that any benefits of regulation would outweigh the potential costs.
The RBA, represented by its head of payments policy Tony Richards and the department's senior manager David Emery at the inquiry in Sydney on Tuesday, said the use of digital currencies is very limited in Australia.
"Digital currencies do not currently raise any issues for the Bank in terms of the Bank's monetary policy and financial stability mandates," Dr Richards said in an opening statement.
While digital currencies are not legal tender, there is nothing to prevent two parties agreeing to settle a payment using a digital currency, he said.
One area where the central bank sees digital currencies taking hold is in the area of international transactions, which can be expensive and subject to delays in the receipt of funds.
However, there are concerns over issues relating to taxation, anti-money laundering and counter terrorism financing rules and consumer protection.
But these are areas outside the RBA's realm of expertise and responsibility, the inquiry was told.
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