Customers of online travel agent Webjet can now book holidays without opening their wallets, after the company became the first in Australia to accept bitcoin.

Customers can purchase travel deals using the cryptocurrency on their smartphones.

The payment option is being trialled on Webjet Exclusives -- the holiday package arm of the global travel booking website -- and could soon be introduced for flights, accommodation, and insurance.

Webjet has teamed up with Australian bitcoin startup BitPOS to develop the payment process for its Webjet Exclusives product.

"We are excited to be the first OTA in the Australian market to accept bitcoin," said Webjet Exclusives CEO Paul Ryan. "It's an innovative addition to the existing payment options available onsite."

BitPOS co-founder Jason Williams said he is pleased that the deal with Webjet would see his company assist in launching bitcoin into the mainstream electronic payments sector in Australia.

"We are delighted to bring bitcoin into the mainstream with Webjet Exclusives, part of a reputable and well-known brand in Australia," he said.

Launched in 2009, bitcoin is a decentralised, digital currency system that uses a global peer-to-peer network over the internet.

Backers argue that the e-money is fast and anonymous, but others criticise its volatility and vulnerability to drug crimes and money laundering.

Bitcoin's value soared above $1,200 in 2013, but sunk below $230 on Wednesday.

CEO of Webjet Exclusives Paul Ryan said the company has more new payment methods in the pipeline in the realm of mobile wallets.

"The personal electronic wallet market is still pretty small, but it's growing rapidly around the world because of the perceived security," he said.

Webjet's move to accept bitcoin in Australia follows a growing trend by big-name companies around the world, including Microsoft, PayPal, and Dell, all of which now accept bitcoin payments for certain products and services.

In December, Time Inc signed a deal with Coinbase that sees the US-based publisher accept bitcoin as a form of payment for a number of its titles.

Despite the growing popularity of bitcoin, it has come under scrutiny by lawmakers in a number of regions globally, including Australia.

In October last year, the Senate Economics References Committee launched an inquiry to evaluate the appropriate definition of cryptocurrencies under the Australian taxation law.

In late August, the Australian Taxation Office (ATO) released its guidance on the taxation treatment of bitcoin and other cryptocurrencies, calling for individuals' bitcoin transactions to be treated like barter transactions with similar taxation consequences, unless they are doing it for business purposes -- a move that bitcoin backers fear will drive bitcoin businesses offshore.

"The ATO's paper has unfortunately taken the position to treat the supply of bitcoins the same way as an exchange of a commodity; something that would involve the costly and impractical imposition of GST on the supply of bitcoins," Australian Digital Currency Commerce Association (ADCCA) chairman Ronald Tucker told the committee investigating bitcoin treatment in Australia, during a hearing last year.

With AAP