Blockstack, a San Francisco-based firm, is adapting the technology of Bitcoin for mainstream finance, including clearing and settlement. A small group of banks have started beta testing Blockstack’s technology, Bloomberg Business reports.

The startup, run by former Google Inc. and Nasdaq OMX Group Inc. employees, is jumping into the competition to use digital-currency technology to tackle financial companies’ slow, antiquated back-office operations.

“We’re not trying to destroy banking or financial services as they are today,” said Peter Shiau, Blockstack’s co-founder and chief operating officer, who previously worked at Standard Chartered Bank in product innovation. “We see what we’re building as technology that can help improve the back-office infrastructure that financial institutions are using.”

Blockstack’s team also includes Philip Harris, a former Nasdaq executive, as an adviser, and chief executive officer and founder Miron Cuperman, who used to work as a senior security engineer at Google.

According to the company’s website, Blockstack is a licensable software package to enable financial institutions and other enterprises to build sophisticated blockchain 2.0 applications on their own private blockchain.

Blockstack.io is a hosted version of Blockstack to allow anyone to start building applications on a fully-featured private blockchain. Available in private beta, Blockstack.io gives financial institutions a stack of inter-operable components to build on, including a private, hosted blockchain, a colored coin issuer for representing assets, a framework for smart contracts using oracles and multi-signature transactions, and the ability to plug in external open source components.

“The initial benefit of a private blockchain is simple: a financial institution can accelerate their learning about blockchain technology and prototype blockchain-based applications quickly and easily,” states the Blockstack product and service announcement. “The ultimate benefit of a private blockchain is that it gives enterprises a choice of infrastructure: whether to run an application on a public blockchain or run on a private blockchain with a group of known counter-parties.”

Blockstack includes critical functionality for financial services: managing time-dependent financial transactions like coupon payments for bonds, ensuring complex compliance requirements from multiple groups in an organization, and scaling up the infrastructure to handle millions of transactions at low latency.

The Blockstack platform is designed to work with technologies designed for Bitcoin Core. As improvements are made to Bitcoin, they can be rolled in Blockstack so that it stays current with the latest technology.

“When you have this private blockchain that’s shared by a number of financial institutions, all you’re doing is just keeping records of the transactions and who owns what,” Shiau said. “What’s nice about the blockchain is you can do that in real time. There are no fees involved.”

Blockstack joins a growing number of fintech companies that want to use or adapt the blockchain technology of Bitcoin to enhance the efficiency and lower the cost of traditional banking and financial systems. Other companies developing ways to use the blockchain to streamline mainstream finance are Nasdaq, which recently partnered with startup Chain to implement the blockchain technology in its Nasdaq Private Market, and Blythe Masters’ Digital Asset Holdings, which uses distributed ledgers to track and settle both digital and mainstream financial assets in a fast and secure environment.