Nine of the world's biggest banks including Australia's Commonwealth Bank have joined forces with US financial tech firm R3 to create a framework for using blockchain technology in the markets.
It is the first time banks have come together to work on a shared way in which the technology that underpins Bitcoin can be used in finance.
Over the past year, interest in blockchain technology has grown rapidly. It has already attracted significant investment from many major banks, which reckon it could save them money by making their operations faster, more efficient and more transparent.
The new project, the result of more than a year's worth of consultations between R3, the banks and other members of the financial industry, will be led by R3 CEO David Rutter, formerly CEO of electronic trading at ICAP Electronic Trading, one of the world's largest interdealer brokers.
"We held several roundtables...to deeply consider what the possible implications of the blockchain were, and what it could possibly do to save money, and time, and to create a better paradigm for the world of Wall Street and finance," Rutter said.
Those that have signed up to the initiative alongside CBA so far are Goldman Sachs, Barclays, JP Morgan, State Street, UBS, Royal Bank of Scotland, Credit Suisse, and BBVA.
The blockchain works as a huge, decentralised ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers.
The data that can be secured using the technology is not restricted to bitcoin transactions. Two parties could use it to exchange any other information, within minutes and with no need for a third party to verify it.
Rutter said the initial focus would be to agree on an underlying architecture, but it had not yet been decided whether that would be underpinned by bitcoin's blockchain or another one, such as one being built by Ethereum, which offers more features than the original bitcoin technology.
Once that had been agreed on, Rutter said, the first use of the technology might be the issuance of commercial paper on the blockchain.
"I think that these technologies will probably be post-trade," he said. "I think savings are in the settlement side, in post-trade, in issuance, but not in exchange trading or OTC trading any time in the near future."