Goldman Sachs has become the first major Wall Street bank to invest in bitcoin in a big vote of trust for the digital currency, which has suffered a value plunge in recent times.

The bank has led a $50m (£32.5m, €45.3m) funding round with Chinese investment firm, IDG Capital Partners, for bitcoin payment technology firm Circle Internet Financial.

In addition, Circle's existing investors, including Breyer Capital, General Catalyst Partners and Accel Partners participated in the latest funding round.

Announcing the investment, Tom Jessop, managing director at Goldman Sachs' Principal Strategic Investments Group, said it identified Circle as one of the companies that "have the promise to transform global markets through technical innovation".

"We think that Circle's product vision and exceptional management team present a compelling opportunity in the digital payments space," he said.

Goldman's involvement in the bitcoin technology company is expected to provide a big boost for the digital currency, which has suffered a sharp value decline in recent times.

Bitcoin was trading at $227.06 (£147.31, €204.66) as at 7.20 am GMT, according to CoinDesk. In late 2013, the currency rates peaked at more than $1,200.

"Having a franchise like Goldman Sachs as an investor, who has done due diligence, is a vote of confidence," said Jeremy Allaire, the co-founder and chief executive of Circle.

Circle, founded in 2013 by internet entrepreneurs Allaire and Sean Neville, identifies itself as a consumer finance company with secure, simple, and less costly technology for storing and using money. It claims its platform is built on top of open standards and open protocols, such as bitcoin.

Along with the new investment, the company announced that its service now allows customers to hold, send and receive US dollars in addition to bitcoin instantly, securely, and with no fees.