The technological innovation behind bitcoin has the potential to empower the existing financial world, not just disruptt banks out of existence as some have foretold, according to a former Wall Street exec.

"The blockchain is the financial challenge of our time," said Blythe Masters, CEO of Digital Asset Holdings, on Tuesday at the Exponential Finance Conference hosted by CNBC and Singularity University. "It is going to change the way that our financial world operates."

Arguing that bitcoin's underlying technology has the opportunity to improve settlement latency and system security for firms, Masters said the market for financial blockchain applications will ultimately be "measured in the trillions."

While promoting her own firm-which she said bridges the gap between the blockchain development world and financial services-Masters said that major financial firms "have all begun to dedicate a significant amount of time and effort" to learning about the technology. She previously served as an executive at JPMorgan Chase.

In the past six months, "everybody realized that bitcoin's more than a currency," said Brian Kelly of Brian Kelly Capital. "Everybody had their 'aha' moment, and investors with many millions of dollars to spend are starting to see how it can be used."