A Turnbull government frontbencher has said the Coalition is not afraid of getting into business with companies in the cryptocurrency world after it made a multimillion-dollar taxpayer funded investment in bitcoin technology.

Angus Taylor, the Assistant Minister for Cities and Digital Transformation, on Friday awarded the government's second largest grant in its Smart Cities and Suburbs program to a project partly run by Power Ledger the first Australian company to list itself on digital currency exchanges.

The $8.6 million push, which will combine $2.6 million in federal government grants with further funding from local council, will go towards a project run by Perth-based company Power Ledger in partnership with Curtin University, Murdoch University, the CSIRO and eight others.

The price of the company's tokens doubled from 46 US cents to 79 US cents following the announcement, driven by trades on the increasing legitimacy of the ascendant market through federal government investment.