TORONTO — A report from Canada’s Senate says Ottawa should use a “light touch” when considering any regulation of Bitcoin and other digital currencies, to avoid stifling the growth of these new technologies.

The report recommends that the federal government should employ “almost a hands off approach” when it comes to virtual currencies, monitoring the situation as it evolves and only introducing regulations as necessary.

It also recommends that the government review the regulatory environment for digital currencies in the next three years.

The report is the culmination of more than a year of research by the Standing Senate Committee on Banking, Trade and Commerce, including interviews with 55 witnesses and a fact-finding trip to New York City.

The committee says the technology involved in digital currency transactions could be used to protect Canadians from cyber identity theft.

The Bitcoin Alliance of Canada said it a news release that it welcomes the report’s findings and urges the government, as well as the private sector, to consider them.