The price of the digital currency bitcoin rose sharply on Monday with news that the U.S. is set to have its first regulated exchange.
San Francisco-based Coinbase offers storage services for bitcoin users, and the company is set to open a new exchange on Monday morning. Called Lunar, it will have regulatory approval in half of the states in the U.S., according to a report in the Wall Street Journal, including New York and California.
The company last week announced a major new round of funding and has now raised $106 million. The New York Stock Exchange and Spanish bank BBVA are just some of the company's high-profile backers, along with USAA bank, the investment arm of Japanese telecom NTT DoCoMo, and former Citigroup CEO Vikram Pandit.
Bitcoin is a virtual currency that allows users to exchange online credits for goods and services. There is no central bank that issues them - instead, bitcoins are created online using a computer to complete difficult tasks, in a process known as mining. The digital currency is renowned for its volatility and has been heavily criticized for facilitating illegal activity, given that it can be used anonymously.
The insolvency of Japanese exchange Mt. Gox and the recent trading suspension at Bitstamp, the second-largest dollar-bitcoin exchange , has hurt the reputation of the cryptocurrency and has dented the price, which tanked by around 65 percent in 2014.
Monday's news caused its value to spike, however, and is likely to inject some much-needed trust back into the digital currency. It saw a 16 percent jump on Monday morning and was trading close to $300 for one bitcoin, according to industry website CoinDesk.
Coinbase was not immediately available for comment when contacted by CNBC, but CEO Brian Armstrong told CNBC's "Squawk on the Street" last week that the company's new investors were using the company to gain insight into how bitcoin works.
"They're really excited about it as a technology, and these people are bitcoin believers," Armstrong said. "They're really interested in the potential that it has to make payments fast, cheap and global for everyone around the world."
Access to CoinBase's exchange, which comes ahead of a similar project by the Winklevoss twins, will only be available in states where it has approval, the WSJ reported.
Meanwhile, New York regulators are currently weighing up a raft of new rules to regulate bitcoin and other virtual currencies. The New York State's Department of Financial Services has proposed issuing a "BitLicense" which it said would protect consumers, prevent money laundering and enforce cyber security. Coinbase's new exchange will act under current regulations.
CNBC's Everett Rosenfeld contributed to this article.