A government inquiry in Australia has recommended that Bitcoin should be recognised as a currency, and that it should be treated the same way as any other "national or foreign currency" in Australia.

The inquiry was established after the Australian Taxation Office ruled in 2014 that Bitcoin is a commodity and "neither money nor a foreign currency" - this meant that people holding Bitcoin balances were liable to pay the standard taxes associated with holding commodities.

Bitcoin value against the dollar over the last two years

This decision was disputed by Australia's Bitcoin community who threatened to relocate startups to other territories.

Senator Sam Dastyari, who chaired the committee said that he hoped that the ruling would encourage tech innovation in the country:

"Without a doubt, the main benefit will be the confidence and certainty that removing a goods and services tax will provide to our own digital entrepreneurs, and the foreign businesses who want to set up here."

He continues: "Most importantly, it will send the message to local tech entrepreneurs that their government is listening to them, and that in itself is a major step forward."

The digital asset is recognised as currency in the UK, while it is treated as property rather than money in the US.

Bitcoin is not recognised as legal tender by eurozone authorities.