A new consortium that includes Australia’s best known research organisation aims to build a platform allowing businesses to take advantage of ‘smart’ contracts with self-executing clauses.
The Australian National Blockchain (ANB) is backed by CSIRO’s Data61, IBM and legal services firm Herbert Smith Freehills.
“Smart legal contracts” (SLCs) on the ANB will be able to have clauses that can be triggered via external data sources, such as IoT sensors. An example given by Data61 is a sensor at a construction site that could automatically signal a bank to trigger payment after a delivery.
A statement issued by the new consortium said that ANB “will be the first large-scale, publicly available blockchain solution available to businesses of all kinds across Australia, and designed for Australian legal compliance.”
The initial ANB pilot will be based on IBM’s blockchain platform and is expected to begin before the end of 2018. In a statement the trio of consortium members said that regulators, banks, law firms and other Australian businesses would be invited to participate.
The group said that using distributed ledger technology would allow “multiple trading partners to collaborate and establish a single shared view of a contract without compromising details, privacy or confidentiality”.
Data61 last year released the results of a government-backed research program into the potential of blockchain-style technologies that concluded they “hold promise as a new foundation for transactions in society”.
A Data61 report said that the “legal status of smart contracts as legal contracts is currently debated”. Smart contracts “as computer programs, may be the wrong category of thing to be a legal contract,” the snappily titled Risks and Opportunities for Systems Using Blockchain and Smart Contracts said.
However, the report added: “Nonetheless a smart contract may provide evidence for there being a legal contract, and may be able to facilitate the execution of a legal contract. Importantly as a mechanism for the execution of provisions of a legal contract, smart contracts can carry and conditionally-transfer digital currency and other digital assets or tokens between parties. This can be done in a predictable and transparent way on the neutral ground provided by the mechanised infrastructure of a blockchain.”
ASX Limited, the operator of the Australian Securities Exchange, is currently preparing to roll out a blockchain-based system to replace a key piece of trading infrastructure. The new system, which replaces the ASX’s ’90s era CHESS, is based on blockchain-inspired distributed ledger technology (DLT) developed by Digital Asset Holdings.
Earlier this month the World Bank revealed that a blockchain-based bond, managed by the Commonwealth Bank of Australia (CBA), had raised $110 million.