New platform to enable companies to execute smart contracts using blockchain technology

AUSTRALIAN companies will be able to use digitised contracts, exchange data and confirm the authenticity and status of legal contracts using a new digital platform underpinned by blockchain technology.

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AUSTRALIAN companies will be able to use digitised contracts, exchange data and confirm the authenticity and status of legal contracts using a new digital platform underpinned by blockchain technology.

The CSIRO’s data science and innovation group Data61 has partnered with law firm Herbert Smith Freehills and IBM to build the platform, which will allow Australian firms to engage with each other using blockchain-based smart legal contracts.

Smart contracts use computer code to digitally facilitate, verify and enforce the negotiation or performance of a contract between multiple parties, thereby supporting the digital transfer of money, property, shares and other assets while avoiding the services of a middleman.

Herbert Smith Freehills blockchain and smart legal contract lead Natasha Blycha said the platform, known as the Australian National Blockchain (ANB), represented the first large-scale, publicly available blockchain solution for Australian legal compliance.

“Technologies like blockchain are set to transform the legal industry and the wider business landscape as we know it,” she said.

“This presents a huge opportunity for agile and forward-thinking firms and has potential to deliver significant benefits to our clients and the business community as a whole.

“Our clients are enthusiastic about process automation, and how it can support a move away from paper-based systems, simplify supply chains and quickly and securely share information with customers and regulators.”

The consortium partners will test the concept as a pilot project using IBM’s blockchain technology, and is working with another Australian law firm to bring the ANB to market.

Regulators, banks, law firms and other Australian businesses will be invited to participate in the pilot, which is expected to start before the end of the year.

If the pilot is successful, the consortium intends to roll out the technology to international markets.

IBM Global Business Services vice president Paul Hutchison said the ANB could be an “inflection point for commercial blockchain”, spurring innovation and economic development across the country.

“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,” he said.

Last year, Data61 delivered two reports to the Federal Government on how blockchain technology could be adopted across government and industry in Australia.

Data61 senior research scientist Dr Mark Staples said they revealed that distributed ledger technology represented a significant opportunity to generate productivity gains and innovation.

“For complex enterprise contracts, there are huge opportunities to benefit from our research into blockchain architecture and into computational law,” he said.

“Smart contracts have many applications, and as the ANB progresses we look forward to exploring other business use cases to roll out.”

Smart contracts on the ANB will be able to record data from external sources such as Internet of Things devices, allowing clauses to self-execute when contract conditions are met.

The consortium gave the example of construction site sensors that could record on the blockchain the time and date of a delivery of materials.

That event would trigger a smart contract between the construction company and the bank, automatically notifying the bank that terms have been met to provide payment for the goods.