While banks have generally been cool to virtual currency, the technology that powers Bitcoin is of considerable interest — enough to draw millions of investment dollars from several traditional financial companies.

Bitcoin payments are verified on a public ledger called the blockchain, which is not managed by a central authority. This technology enables Bitcoin to be a reliable, fast and inexpensive method of payment. This technology can be adapted to other methods of payment without requiring Bitcoin to be brought along with it.

"Blockchain technology is of interest for us. We want to become familiar with it and see what it can do," said Jay Reinemann, executive director of strategy and corporate development for BBVA Ventures, which participated in a $75 million funding round for the Bitcoin wallet provider Coinbase. BBVA Ventures is the venture capital arm of BBVA, and has a mission of finding strategic opportunities in financial technology.

Reinemann would not disclose how much BBBA invested in Coinbase. Other traditional financial companies, including USAA and the New York Stock Exchange, also invested in Coinbase.

"On top of the blockchain technology, Coinbase is one of the largest and most widely used of all of the Bitcoin-related companies," Reinemann said. "So it gives us a catbird seat to understand how consumers are really interacting with the technology, how they are using it."

Most documents can be digitized, turned into code and placed in a blockchain, which could make the technology applicable to uses beyond virtual currency payments. UBS, for example, has suggested the technology can verify international payments and other financial transactions.

Until recently, most financial services companies avoided virtual currency, given the regulatory uncertainty and Bitcoin's reputation as prone to price fluctuations and other risks. Bitcoin has also been used for criminal activity, such as online drug sales.

"It's obvious why banks aren't engaging with Bitcoin," Reinemann said. "It's a challenge from a regulatory perspective to truly engage as a bank."

BBVA's banking lines of business are not becoming directly involved with Bitcoin as a result of this investment—BBVA will not accept deposits in Bitcoin, for example. But there are potential benefits from Coinbase's technology model, Reinemann said.

"There's an opportunity to make financial services easier for consumers and make merchant services more transparent, as well as reduce fees," Reinemann said.

Other companies that use blockchain technology are also receiving investment, despite Bitcoin's volatility. For example, BlockCypher, a U.S.-based technology company that allows developers to build blockchain applications, just received a $3.1 million seed round.

"Despite a recent dip in the price of Bitcoin as an asset, we still believe in the blockchain technology underpinning Bitcoin to have some truly innovative applications beyond payments, such as smart contacts, securities trading or even as a protocol to connect devices on the 'Internet of Things,'" said Nikhil Joseph, an analyst in the emerging technologies service at Mercator Advisory Group, who added the new investments are more of a risk-hedging strategy than a commitment to support Bitcoin-backed services.

It's also noteworthy that BBVA Ventures did not disclose the size of its investment, said Gareth Lodge, a senior analyst at Celent. "This isn't the people who run BBVA's payment system, but the part of the bank that invests in companies where it thinks it can generate a return," Lodge said. "The value invested would define just how interesting [Bitcoin is to BBVA], but BBVA has declined to say how much of the $75 million."

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