City employees in Vicco, Kentucky could be receiving their paychecks in the form of bitcoin as early as this month after officials there agreed on Monday to begin compensating the chief of police with the emerging crypto-currency.

City officials said on Monday this week that there won’t be a problem with paying Vicco Police Chief Tony Vaughn electronically using Bitcoin, an online-only digital form of currency that has in recent months been accepted at an increasing number of retailers around the world.

Bitcoin allows users to securely pay for goods and services with near total anonymity, all while avoiding the regulations and restrictions often imposed by state-controlled currencies, such as the dollar.

Cris Ritchie for Kentucky’s Hazard Herald reported on Wednesday that Vaughn made his request last month, and this week city officials said they finished their research and would be willing to pay the chief’s salary in bitcoin if that’s his preference.

"We done a checkup on it, and that's the way he wants paid, and that's the way the city is going to pay him," City Commissioner Claude Branson told the Herald.

“Basically his next paycheck” could be in bitcoin, Mayor Johnny Cummings said to the paper. “They've set up the accounts for Vicco and for Tony, so it can be transferred.”

"We just want to be on top of things, and up-and-coming and more progressive as a city," the mayor added.

All applicable federal and state taxes will still be chopped from the top of Vaughn’s salary each pay period, Cummings added, but the remainder will be electronically converted and put in the control of a city-run bitcoin account where funds will then be instantaneously transferred to Vicco’s own digital wallet.

"I'm excited about it; it's a first for Vicco again," Vaughn told Richie, referring to an ordinance passed by the city earlier this year that outlaws discrimination based on sexual orientation. Last month, the United States Senate approved of a similar bill that functions on a federal level — the Employment Non-Discrimination Act, or ENDA — but that act has yet to clear Congress.

But while the EDNA may eventually make its way to President Barack Obama’s desk and be signed into law, no measures whatsoever have been proposed in Congress just yet that would require the government to pay federal employees in bitcoin. Meanwhile, though, Federal Reserve Chairman Ben Bernanke wrote to the Senate recently that virtual currencies, like bitcoin, "may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system."

One bitcoin is currently worth US$1,230, up from $240 just one month earlier. Earlier this year a Canadian man attempted to sell his Alberta home for bitcoin, and the University of Nicosia in Cyprus recently became the first institution of its type to accept the virtual currency for tuition.