Cuber, the coloured coins blockchain app developed by ChromaWay for Estonia's LHV Bank, has picked up the Innovation Award 2016 - the first time a blockchain banking application has won such an award.

The Estonian Banking Association, which bestowed the award, recognises the achievements of innovative services to banks, their customers as well as back office optimisation, said a statement.

ChromaWay beat off some stiff competition, from the likes of TransferWise, which did a mobile banking app with LHV; DNB Bank's ERGO Insurance app; SEB's paperless ID system; and a mobile app from Swedbank.

LHV Bank, which is the largest Estonian financial group, wanted a secure technology for implementing a Euro-based payment solution. Last year when the Cuber project was launched, ChromaWay co-founder Henrik Hjelte explained the app is "basically an alternative to cash. Instead of being dependent on Bitcoin price fluctuations, users hold reclaimable tokens representing euros. Cuber becomes a new kind of open platform that takes advantage of the blockchain innovation and Bitcoin security".

Coloured coins is a way to use the Bitcoin infrastructure to transfer tokens of value. It uses a tiny amount of bitcoins to represent financial products, real-estate, tickets and so on. Some of the features of coloured coins are Bitcoin integration, mature security mode and atomic transactions between assets.

ChromaWay's chief technical officer and co-founder Alex Mizrahi led the open source coloured coins project from its inception in 2012. He holds an MSc in applied mathematics from Donetsk National University, and is a respected author of several academic papers on Bitcoin.

ChromaWay has also used the coloured coins protocol to create a syndicated startup investment trading platform with startups data provider, Funderbeam. The companies said the tokenised system addresses a big anachronism in startup investing: the absence of a fast, transparent and liquid secondary market.

Estonia is famous for its commitment to bold digital advancements of every stripe; winning a technology innovation prize there is like being recognised for gastronomy in France .

Jüri Laur, Crypto currency product manager in LHV Bank said on receiving the award: "True innovation very seldom appears from laboratory conditions. More often there is a mess of different crazy ideas and the art is to pick out of these the ones that could really work and push the industry forward. With Cuber platform we at LHV have a feeling that this is something special and we are glad that also the jury recognised this."