The technology used to power bitcoin is being adopted by major banks.

A large Korean financial institution and a Nordic bank have joined forces with blockchain technology companies to facilitate virtual currency transactions in the near future, a sign of how the banking world is embracing disruptive technologies.

Blockchain technology, a virtual distributed ledger of transactions shared peer-to-peer, can record ownership across a public network of computers rendered tamper-proof by advanced cryptography. It is already widely known as the platform for cryptocurrency bitcoin. 

Seoul-headquartered Shinhan Bank will provide bitcoin remittance services between Korea and China from December 2016, according to numerous media reports. The remittance service will be powered by Streami, a blockchain solutions provider for the financial services industry, which moves value between the two countries in the form of Bitcoin.

This, in turn, reportedly saves customers' time and money, as transactions are instantaneous while fees are minimal compared with those charged by incumbent remittance networks. 

South Korea appears to be the perfect candidate to host such a service, considering its residents have access to a network of more than 17,000 ATM machines and 24,000 stores where they can buy bitcoin in person. The South Korean government announced earlier this year plans to issue its own blockchain-based digital currency in upcoming years, subject to regulatory changes, with the country's Financial Services Commission looking to institutionalise digital currencies by 2017.

Separately, SEB, the Swedish bank that operates across Scandinavia, has signed an agreement with Ripple, a San Fransico-based fintech company, allowing customers to use its blockchain technology solution as a basis for real-time payment transactions between accounts in Stockholm and New York.

SEB has verified that the solution is compatible with the bank's infrastructure and work is underway to build a complete payment solution, it said in a statement this week. The first customer transactions are planned for next year and will offer later cut-off times in addition to real-time transfers, it added.

“In the next step, we plan to expand the solution to include all geographies and time zones in which we operate,” said Paula da Silva, head of transaction services at SEB. “This is a way to explore the potential of new technologies and an example of how we, by working with innovative technology companies, can be even more relevant to our customers.”

Last month, the Commonwealth Bank of Australia and Wells Fargo carried out what they said was the first global trade transaction between two independent banks involving Blockchain technology.

This publication has contacted both Shinhan Bank and SEB for more details and will update coverage accordingly.