A Spanish banking group Santander is going to use the blockchain technology.

Santander InnoVentures, in collaboration with its partners Oliver Wyman and Anthemis Group, has released “The Fintech Paper 2.0″ research that states that using blockchain technology could allow banks to save as much as $20 billion.

Typically banks are not interested in Bitcoin, however they are interested in the software that runs the digital currency — the blockchain. The blockchain system is attractive to banks looking to accelerate their money transfer businesses, besides the technology has potential in other areas — distributed ledgers could be used for “smart contracts” when banks make loans, for example, recording who has borrowed what across a public network.

According to “The Fintech Paper 2.0″ research, it is only a matter of time before distributed ledgers become a trusted alternative for managing large volumes of data. It revolves mostly on how emerging fintech technologies, including the decentralized ledger behind digital currencies, could affect banks.

“We have internally identified 20 to 25 use cases where this technology can be applied,” Mariano Belinky, head of Santander InnoVentures, told during MoneyConf in Belfast on June 15-16 this year.

“We are very excited about distributed ledgers and blockchain technology. They really have the potential to disrupt many of the basic processes we have underlying our transactional products,” she added.

As we know, blockhain refers to the public ledger of bitcoin transactions, which is updated by a network of computers solving complex algorithms to for verification. For every successfully verified transaction, a block of code is added to the blockchain, which makes it more secure and abiding.

“The first major application is being seen in payments. International payments remain slow and expensive and significant savings can be made by banks and end-users bypassing existing international payment networks,” the research indicated.

Banks could make use of the blockchain instead of having to rely on clearing houses to verify transactions. The blockchain system provides better efficiency and transparency compared to the regular approach.

Santander, the world’s tenth biggest bank according to Forbes, is not the only one lender that is investigating how to use the blockchain in traditional banking. UBS has set up a blockchain research lab in London, Goldman Sachs has invested in bitcoin startup Circle and Nasdaq is also experimenting with the blockchain technology. Besides, several banks in Australia have already made the move to integrate blockchain in their current operations.

Moreover, it should not be left unmentioned that at the above-mentioned MoneyConf in Belfast, Gyft, an online platform for buying, sending and redeeming gift cards that is owned by First Data, has partnered with blockchain infrastructure provider Chain to run gift cards for thousands of small businesses on the blockchain. The new program will be launched this fall and will be called Gyft Block.

As said by Vinny Lingham, CEO of Gyft, the blockchain would allow the company to offer its small businesses a “very cheap, very secure and very fast” solution.

However, Dr Dirk Haubrich, head of consumer protection and financial innovation at the European Banking Authority (EBA) still considers the risk of a 51% attack, where a single entity contributes the majority of the network’s mining hashrate and, thus, gains full control of the network and can manipulate the blockchain. He made these comments on Friday at an event titled Controlling Cryptocurrencies at the University of Birmingham in the UK.

According to Haubrich, he had spoken to numerous members of the digital currency world two years ago and at the time, he was assured majority power would never occur. After it did, people assured him it did not matter, as the 51% would not abuse the system.

“As a financial regulator, I don’t believe it. I’ve seen so much stuff happen from the financial institutions that created the financial crisis – and that is partly what brought about virtual currencies in the first place – so I don’t believe in those promises anymore,” Haubrich said.

In reality a 51% attack is feasible – especially with the rise of mining. However the potential damage one could cause is small – though enough that it cause a panic that would seriously threaten Bitcoin’s use as a digital currency. At current network mining difficulty levels, not even large-scale governments could easily mount a 51% attack.

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