The financial services industry is all abuzz about the potential for Blockchain, the technology underlying Bitcoin, to transform the industry. To quote the Bank of England’s chief economist, Blockchain may offer an “imaginative solution to that distributed trust problem”. Many Fintech startups are already running with the technology to create some unique solutions for the financial services industry: a smart contracts platform for syndicated loans (Symbiont); a decentralized clearing network for OTC derivatives (Clearmatics); a multi-asset, multi-currency platform to simplify institutional payments (SETL); a DIY Blockchain and smart contracts platform (Eris Industries); a ledger that connects distributed ledgers (Ripple); a distributed ledger for the precious metals market (itBit's Bankchain); and even a Blockchain-inspired challenger bank (Secco).

Even the incumbents are betting on the potential for this technology in banking. For instance, American Express made its first Bitcoin move this year with an investment in Abra – a global remittance service built on Blockchain.

Goldman Sachs has not only invested in a Bitcoin startup, Circle Internet Financial, but is also patenting its own cryptocurrency that simplifies securities trading and settlement. Meanwhile, Spanish bank BBVA’s annual Fintech Open Talent competition featured 10 Bitcoin and Blockchain start-ups in the finals this year.

Incidentally, BBVA is also backing the R3 initiative, an industry-wide coalition that currently includes over 40 of the world’s leading banks, to explore the use of Blockchain in mainstream banking. The consortium, led by Fintech firm R3, will focus on developing commercial Blockchain applications as well as defining consistent standards and protocols for this emerging technology.

So, industry interest in integrating Blockchain technology is clearly gaining momentum, and we expect some significant developments to emerge in the coming year. It is therefore clearly time for all banks to define a path to adoption for this transformational concept.