American Computer technology firm Dell Inc has become the biggest retailer so far to embrace digital money after it announced accepting Bitcoin for purchases on its website.

Dell has partnered with third-party payment processor Coinbase to enable its customers to pay for online purchases using the controversial virtual currency, Bitcoin.

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Bitcoin hugged the limelight early this year after Mt. Gox, the Tokyo-based largest Bitcoin trader in the world, collapsed, causing millions of dollars' worth of Bitcoin losses.

Dell spokesman David Frank said Dell decided to finally accept Bitcoin payments as a result of listening to the demands of the customers.

"This is another way of forging relationship with our customers," Frank said in a statement on Friday.

It was Coinbase that approached Dell and introduced the idea of accepting Bitcoins a few months back, said Coinbase's director of business development Adam White.

Two weeks ago, White said Dell contacted Coinbase and expressed interest to adopt Bitcoin quickly in time of the back-to-school shopping.

White said Dell's Bitcoin adoption only shows that merchants are now seeing the potential power of Bitcoin as a payment option.

Dell is now the biggest retailer, so far, among the 35,000 merchants that accept Bitcoin payment through Coinbase's payment tools that convert the virtual currency into dollars.

Analysts said Dell aims to attract more online buyers in order to raise its annual sales of personal computers, printers and tablets. In 2013, the company reported annual sales of nearly US$60 billion.

Bitcoin was first introduced in 2009, attracting investment firms and venture capitalists, who saw the potential of the virtual currency.

The currency, however, mainstream merchants and institutions have not fully embraced Bitcoin because it has not been regulated by any government.

Until last Thursday, when the state of New York proporsed regulations for Bitcoin.

TagsDell, bitcoin, Dell Bitcoin, Bitcoin Payments, Coinbase