Until Shenzhen residents took part in an official DC/EP trial last month, we Homo sapiens have never used a central bank-issued digital currency. The fintech innovation has ignited the imagination of tech designers, financial professionals, monetary experts and economists alike.

Some day in the future, could it be possible that we human beings may no longer rely on ATMs and bank tellers for currency notes? Could it also be possible that smartphones would become passé or redundant when we exchange info or make/receive payments? In such scenarios then, where would you "store" your digital currency?

As a reporter on the central bank beat, I heard some interesting discussions of late. They center on whether novel forms of digital terminals like smartwatches or smart-glasses could store digital currency for transactions. Experts believe digital currency will change the world in the next 30 years; and even in the short term, it has the potential to make a big difference to society.

Amid proliferation of cryptocurrencies and other new forms of store of value, central banks around the world have been cautious so far in developing a digital currency of their own. They have been sticking to their traditional mandates to use monetary policy to foster employment, ensure price stability, and prevent financial risks.

But, as technologies like fintech make rapid advances through innovation, central bankers have been trying to wrap their minds around the potential impact of digital currencies on monetary policy, financial stability, and cybersecurity.

Meanwhile, the unbridled private sector became audacious and created a decentralized blockchain technology, which spawned crypto-assets like Bitcoin, while Facebook has been toying with a proposal to launch its own digital currency called Libra.

Sensing a potential challenge, even a threat, to existing traditional currencies, monetary authorities have been busy figuring ways to keep the situation from getting disrupted beyond control.

Leaders from the world's most powerful 20 economies and regions have agreed that before the issuance of any cross-border digital currency that may even be guaranteed by central banks' reserves, they should first set up relevant legal, regulatory and oversight requirements, which are "adequately addressed through appropriate design and by adhering to applicable standards".

The influential global standard-setting bodies, such as the Financial Stability Board, are busy reviewing the existing standards and making adjustments as needed in face of the potential challenges. The International Monetary Fund is also working on macro-financial implications of digital currencies. Other proposed regulations seek to address money laundering, terrorist financing and proliferation of financial risks relating to virtual assets.

It's difficult to say how fast the regulation should go before and after the innovation. Excessively tight regulations could constrain new ideas and impede innovation, besides perpetuating an arguably dull, weak or vulnerable system.

On the other hand, a lax or lagging regulatory regime will likely encourage risky activities that could wreak havoc on the financial system. Monetary authorities and innovators around the world, it seems, are playing cat and mouse with each other.

Fintech advances could spark a crisis or prove to be an opportunity to usher in much-needed positive change, depending on how responsible innovation would be, even as it tends to bring about disruptive changes in the global financial sector.