CSIRO’s Data61 group, law firm Herbert Smith Freehills and IBM have formed a consortium to build a blockchain-based smart contracts platform dubbed the Australian National Blockchain (ANB).
Using the ANB, businesses of all kinds and sizes will be able to use digitised contracts, exchange data and confirm the authenticity and status of legal contracts, the consortium said.
Touted as “a significant new piece of infrastructure in Australia's digital economy” the blockchain will enable companies to manage Smart Legal Contracts (SLCs) over the full term of the agreement.
The SLCs can include ‘smart clauses’ able to record external data and self-execute if conditions are met. An example given by the consortium was sensors on a construction site recording the time and date of a delivery of a load on the blockchain which triggers a smart contract between a construction company and a bank, automatically notifying the bank that terms have been met to provide payment on the delivery.
ANB is based on IBM Blockchain and the consortium is working with another, unnamed Australian law firm to bring it to market. Regulators, banks, law firms and businesses will be invited to participate in a pilot which is expected to start before the end of the year.
"Blockchain will be to transactions what the internet was to communication – what starts as a tool for sharing information becomes transformational once adoption is widespread. The ANB could be that inflection point for commercial blockchain, spurring innovation and economic development throughout Australia," said Paul Hutchison, vice president, Cognitive Process Transformation, IBM Global Business Services.
Data61 last year launched a comprehensive review of blockchain and smart contract technology. The review included two reports – Distributed Ledgers: Scenarios for the Australian economy over the coming decades and Risks and opportunities for systems using blockchain and smart contracts for Treasury on how the technologies could be adopted across government and industry.
Then Treasurer Scott Morrison said at the time that blockchain would have a “profound impact” on the economy.
“Our reports identified distributed ledger technology as a significant opportunity for Australia to create productivity benefits and drive local innovation,” said Dr Mark Staples, senior research scientist at Data61.
“For complex enterprise contracts, there are huge opportunities to benefit from our research into blockchain architecture and into computational law. Smart contracts have many applications, and as the ANB progresses we look forward to exploring other business use cases to roll out.”
A number of Australian businesses are already experimenting with blockchain-based smart contracts.
In July, Commonwealth Bank and five major supply chain players traded and tracked a shipment of seventeen tonnes of almonds as part of a blockchain pilot, storing shipping container information, completion of tasks and shipping documents, on a purpose-built blockchain.
In February, Webjet rolled out ‘blockchain as a service’ to four external travel agency and hotelier partners, to help them reduce the financial losses and pain caused by disputed bookings.
The APAC arm of logistics giant UPS in March announced it was working on a blockchain proof of concept within its supply chain environment with ASX-listed software provider Yojee.
The ASX is working towards replacing its decades-old Clearing House Electronic Subregister System (CHESS) with blockchain-inspired distributed ledger technology to record shareholdings and manage the clearing and settlement of equity transactions.
Nevertheless, Gartner research from earlier this year found fewer than one per cent of CIOs globally have invested in or deployed any kind of blockchain-based solution within their organisations.
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