Controversial crypto currency Bitcoin has gained further traction after the German federal government officially recognised it as a currency.
The federal authorities declared Bitcoin an accountable unit that can be used as a means of private exchange multilaterally, reported the Frankfurter Allgemeine Zeitung newspaper.
This now means Bitcoin commercial trading gains and value appreciation are now subject to a withholding tax of 25 per cent in Germany.
The digital cryptographic currency is increasingly appearing on authorities' radars.
An American court this month ruled Bitcoin a legal tender. The United States Congress has said it will investigate the currency, and last week New York authorities said they were considering regulations to rein in its use.
Superintendent Benjamin Lawsky with the New York Department of Financial Services said Bitcoin represented unique challenges and opportunities but pointed [pdf] to risks and abuses with the currency.
"We have also seen instances where the cloak of anonymity provided by virtual currencies has helped support dangerous criminal activity, such as drug smuggling, money laundering, gun running, and child pornography," he said.
"If virtual currencies remain a virtual Wild West for narco-traffickers and other criminals, that would not only threaten our country’s national security, but also the very existence of the virtual currency industry as a legitimate business enterprise."
Financial news organisation Bloomberg this month also set up an experimental ticker, XBT, for users of Bitcoin terminals, providing pricing history and data.