The blockchain technology underlying bitcoin could hurt Swiss banks the most, according to Moody's Investors Service.

"While making cross-border transactions faster and less expensive would be credit positive for banks, these efficiencies could also compress their fees and commissions, a credit negative," Moody's said in a report Monday.

In that scenario, the ratings agency said, Switzerland is most at risk since its massive banking industry generates half of its revenue from fees and commissions.

The banking systems with the largest shares of fee and commission income in revenues

Source: Moody's Investor Service

Blockchain technology eliminates the need for a third-party intermediary by quickly creating a permanent and secure record of transactions between two parties. Bitcoin is the first application of the technology, and many banks are exploring how blockchain can reduce cross-border payments processing time from days to seconds.

Switzerland is also among the most sensitive to that aspect of blockchain technology.

The nation ranks third on Moody's list of countries whose banks handle the most cross-border transactions relative to GDP — excluding outliers Luxembourg and Hong Kong. The UK tops the list, followed by Belgium.

The banking systems with the smallest shares of fee and commission income in revenues

Source: Moody's Investor Service

Known historically as a hub for international banking, Switzerland has also become one of the friendliest countries in the world to blockchain and digital currency enthusiasts.

Its Zug region has already been dubbed "Crypto Valley" for the number of digital currency businesses located there. In July, the nation's financial markets regulator also approved the first Swiss private bank for bitcoin asset management, a move many saw as potentially paving the way for other global banks to do the same.