Australia will lead a committee tasked by the International Organisation for Standardisation (ISO) with coming up with globally approved blockchain standards.

Blockchain – or distributed ledger technology - is an emerging peer-to-peer database tool for recording financial transactions, and is a central component of Bitcoin and other cryptocurrencies.

Banks and other financial institutions have already shown strong interest in adapting it for use in traditional market scenarios, and now Standards Australia has had its proposal on the need for new international standards on blockchain approved by ISO.

An ISO blockchain committee will now be set up. It will have responsibility of developing standards that support interoperability among systems, privacy, security and terminology.

“Leading the ISO blockchain committee will place Australia in the perfect position to help inform, shape and influence the future direction of international standards to support the rollout and deployment of blockchain technology,” Standards Australia CEO Dr Bronwyn Evans said.

“This exciting initiative will put Australia at the centre stage of global innovation and digital disruption.”

NSW Chief Data Scientist, Dr Ian Oppermann, said that blockchain has the potential to be incredibly disruptive for many industry sectors.

“Blockchain effectively decentralises trust and will impact banking, finance, trade and many other services which rely on the existence of a central point of trust,” Dr Oppermann said.

Joining Australia on the technical committee are 35 ISO member bodies including Germany, USA, Canada, Estonia, France, Japan, UK, and Korea.

Federal Treasurer Scott Morrison welcomed Australia’s role in defining blockchain standards.

“The Turnbull Government is excited by the opportunities of distributed ledger technology. We want Australia to be a leading global player in this new area,” he said.

“Establishing standards around this emerging technology will provide a common language for industry, policy makers, regulators and technology developers.

“This will provide a basis for ensuring interoperability as this technology becomes more widely used.”

“The Turnbull Government is particularly pleased ISO is backing Australia to lead the international committee. Leading this committee will cement Australia’s position at the forefront of blockchain technology.”

A number of cutting edge blockchain developments are already underway in Australia, including consideration by the Australian Securities Exchange (ASX) of the technology to replace existing clearing and settlement system for the Australian equity market.

Data61 are also leading a review to consider opportunities to apply blockchain technology across government and the private sector, the Government said.

The Commonwealth Bank, NAB, Westpac and Macquarie Bank are also involved in global tests of blockchain’s applicability in traditional market scenarios.