Microsoft is partnering with R3, a consortium of major banks around the world, to develop new blockchain technologies, leveraging the underlying approach from the Bitcoin digital currency to change the way they track transactions and offer financial services to their customers.

The blockchain is a public ledger of transactions, and the R3 consortium consists of more than 40 banks, including big names such as BNP Paribas, Wells Fargo, ING, JPMorgan and Citi.

Microsoft will work with the consortium to “develop, test and deploy blockchain technologies to modernize decades-old processes and streamline operations, potentially saving billions of dollars from back-office operations,” said Peggy Johnson, Microsoft executive vice president for business development, in a blog post explaining the news.

Goals include faster trades of assets such as stocks and bonds, and direct transfer of ownership, which cuts clearing houses out of the processes, something that’s appealing to banks because it promises to cut costs and reduce the risk of fraud, Johnson said.

The partnership could be a boon for Microsoft’s partners and its cloud platform. The consortium will use Microsoft Azure and also have access to more than 45 “blockchain as a service” technologies from companies that work with Microsoft. In addition, Microsoft says it will offer dedicated technical support and service to R3’s blockchain labs.

Microsoft announced the news at its Envision business technology conference in New Orleans this morning. Speaking with Johnson on stage at the event, Paypal President and CEO Dan Schulman said Bitcoin is “not necessarily something that we’re betting on,” even though PayPal allows Bitcoin through the Coinbase bitcoin wallet.

However, the underlying blockchain technology is “very interesting,” Schulman said. What blockchain allows is … theoretically a friction-free, cost-free way of doing transactions.” The key, he said, is to tie the blockchain into a currency that isn’t as volatile as Bitcoin.