Tesla has suspended the use of Bitcoin to pay for its vehicles because of the environmental impact of using the currency, its CEO Elon Musk said in a tweet.

Commenting on the plans, Musk said: "Tesla has suspended vehicle purchases using bitcoin.

"We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.

"Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment."

In the announcement made on Twitter, Musk added Tesla would not be "selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy".

He also shared that the company is "looking at other cryptocurrencies that us <1 percent of Bitcoin's energy/transaction".

Bitcoin fell by more than 17% after the tweet and is currently trading at $51,323, while Tesla shares also dipped.

The digital currency is created when powerful computers compete against each other to solve complex mathematical puzzles, an energy-intensive process that often relies on electricity generated with fossil fuels, particularly coal.

At current rates, such Bitcoin mining uses about the same amount of energy annually as the Netherlands did in 2019, according to data from the University of Cambridge and the International Energy Agency.

Tesla said in February that it had invested around $1.5bn in Bitcoin and it planned to begin accepting the digital currency as payment again "soon". Its Bitcoin holdings are currently worth $2.48bn, according to securities filings.

Musk has been one of the world's most high profile proponents of cryptocurrencies, often tweeting about Bitcoin and the once-obscure digital currency Dogecoin.