Estonian bank LHV has hired a virtual currency expert to develop bank services for currencies such as Bitcoin, with the bank saying the project is a international first.

LHV's virtual currency expert Asse Sauga told Eesti Päevaleht today his first task is to analyze virtual currencies on the whole. Besides the well-known Bitcoin, there are more than 300 other similar currencies around.

“If you look at Bitcoin's software then you will find the root systems of a bank,” he said, adding that financial services can be constructed on Bitcoin's protocol and in the future financial service providers will be forced look into that technology.

Concerning the use of virtual currencies in Estonia, Sauga said the new technology has been forced into the existing legal framework, making currencies such as Bitcoin illegal to use in a similar way to the Euro. Bitcoin transfers, unlike Euros, are also subject to VAT.