While Jamie Dimon and Warren Buffett express doubts about bitcoin, executives running the financial industry's back offices are looking at mimicking the virtual currency's methods of moving money quickly and cheaply.

FIS, a provider of systems used by banks to handle payments, is examining whether a public ledger like bitcoin's could help securely move funds on existing networks, Fred Brothers, the firm's chief innovation officer, said. Fiserv, a provider of technology for payments and accounts, is examining bitcoin's use of encryption to ensure transfers are secure, said Marc West, a senior vice president.

Such interest shows how Wall Street could seek to reap benefits touted by bitcoin's backers without using the virtual currency itself. Bitcoin, devised by an anonymous programmer or programmers in 2008, has drawn entrepreneurs and retailers looking to popularize it as a low-cost alternative to established payment systems, supplanting credit cards and international wire transfers. Instead, a variety of financial firms might copy its underlying design to hone their own systems or services sold to clients.

"It's safe to say that every bank is looking at what's going on with bitcoin and those types of technologies," said Steve Kenneally, a vice president of the American Bankers Association. "Most of the larger banks are investigating it. The larger the banks, the further along they are."

Goldman Sachs analysts wrote in a March report that while bitcoins may not make a viable currency, the technology "could hold promise." The software relies on a public record of transactions. When someone spends all or part of a bitcoin, the change in ownership is recorded by a global network of computers and posted to the register, ensuring that individual units can't be simultaneously held or spent by numerous people. Operators of computers solving and verifying transactions are rewarded with new bitcoins for their work.

Rules and standards

Bankers, including JPMorgan Chase CEO Dimon, have predicted that bitcoin probably won't last after governments subject it to rules and standards akin to those for other payment systems.

"I wouldn't be surprised if it's not around in 10 or 20 years," Buffett, the billionaire chairman and CEO of Berkshire Hathaway, said in March. "It does not meet the test of a currency."

Buffett's longtime business partner, Charles Munger, was less charitable last week, saying that calling bitcoins "rat poison" would understate his disdain.

The technology could augment, or even replace, existing systems such as the Automated Clearing House fund-transfer system used by entities including banks, said Gil Luria, an analyst at Wedbush Securities Inc.

Wedbush is examining the potential use of systems akin to bitcoin for interbank money transfers, said Luria, who oversees the effort. Such technologies include Ripple, a bitcoin-like system that completes transactions even faster.

"If there was a better solution that we felt was secure, we believe we'd use that infrastructure," said Luria, who doesn't rule out that firms might use bitcoin directly. "If banks were to transact with each other in bitcoin, that would be a large opportunity."

The clearinghouse system handles debit and credit transfers in the U.S. Its network moved $9.8 trillion during last year's fourth quarter, according to the national electronic payments association. The system typically settles transactions within a business day, which is one reason why it can take days for money to transfer to an account. Bitcoin moves funds in minutes, while Ripple settles in seconds.

Emerging technology

The clearinghouse, which operates an automated network for companies including banks and credit unions, doesn't view bitcoin-like systems as a challenger, even if some banks could use the technology for transactions, said Dave Fortney, a senior vice president who oversees new products.

Fiserv provides technology and services to more than 14,500 clients including banks, brokerages and mortgage companies, and runs a person-to-person payments service called Popmoney. It is looking at many emerging technologies, including bitcoin, and may use such concepts in its products, West said. He's interested in bitcoin's use of cryptography - a mix of mathematics and computer science to verify transactions quickly.

Companies are also sprouting up to help financial firms handle bitcoin.

Vaurum, a Palo Alto startup that enables companies including banks and brokerages to trade and store bitcoins on behalf of customers, said last week that it raised $4 million in seed funding from investors including Battery Ventures and Tim Draper, co-founder of investment firm Draper Fisher Jurvetson.

Regulators around the world have expressed concern that bitcoin may be used to finance terrorism, trade in illicit merchandise or launder money.

That reputation makes banks reluctant to use the digital currency directly, said Cary Whaley, a vice president at the Independent Community Bankers of America. While virtually none of the group's members are interested in using the digital money, a small number are examining its concepts, he said. That doesn't mean they'll adopt it, he said.

"What banks are looking at is updating the technology they already have - using the rails that they have in a more efficient, faster manner through modifying existing payment systems," Whaley said.