The price of a single bitcoin on Tuesday climbed to its highest level in three weeks following reports that Russian authorities might recognize the world’s most popular digital currency as a legitimate financial instrument some time next year.

If true, this would represent a regulatory about-face for the Russian government, which had previously threatened to jail anyone caught using the world’s most popular digital currency. The story was first reported by Bloomberg News.

The price BTCUSD, -0.16% of a single coin traded as high as $1,232 on Tuesday.

After falling sharply during the second half of March, the bitcoin price recovered over the past week as a controversy over a proposed software update that would’ve expanded bitcoin’s ability to process transactions threatened to split bitcoin into two separate tokens has appeared to subside. Also, a Japanese law that will allow large financial institutions to participate in the bitcoin market finally took effect at the beginning of the month.

Chris Burniske, blockchain analyst and products lead at ARK Invest, said that, although the market appears to be pricing in a resolution to the debate about how to increase the processing speed of the bitcoin network, the issue is hardly settled.

“There are still some hurdles the community has to overcome,” Burniske said.

Adding to the encouraging regulatory news, China-based OkCoin announced on Tuesday that it had officially updated its anti-money-laundering and know-your-customer policies, leading to speculation that OkCoin, one of China’s “big three” exchanges, could reinstate customer withdrawals as soon as April 23, according to Charles Hayter, chief executive officer of CryptoCompare, a provider of bitcoin data and analytics.

“The ecosystem is maturing and a dose of regulation in the right form can only help to support the space,” Hayter said.

In March, the Securities and Exchange Commission rejected two proposed bitcoin exchange-traded funds on the grounds that it would be difficult for exchanges to provide the necessary market oversight to prevent market manipulation and other unsavory practices.