Federal Treasury and other undisclosed government agencies will take part in a detailed nine-month study by CSIRO’s Data61 of how they might be able to take advantage of blockchain technology.
Blockchain technology, which underpins Bitcoin, allows multiple, independent parties to share digital information or transact with one another, using distributed or shared ledgers.
It is widely seen as a disruptive influence on financial systems and its potential is being increasingly studied by the finance sector.
NAB, Westpac, CBA and Macquarie Bank are already part of a major global study effort known as the R3 Consortium, which is looking at how major banks might adopt blockchain.
The Australian Securities Exchange (ASX) is similarly looking to blockchain to improve settlement systems and drive down administration costs, taking a $15 million stake in a developer of the technology.
And the Reserve Bank of Australia (RBA) is also backing the studies of blockchain, taking a particular interest in the ASX’s efforts.
“As the overseer of clearing and settlement facilities licensed to operate in Australia, the [Reserve] Bank obviously has a keen interest in the plans of the ASX Group to explore the use of distributed ledgers,” RBA’s payments policy department head Tony Richards said in February.
Richards said that both the RBA and the Australian Securities and Investments Commission (ASIC) were working alongside ASX on their project.
Now it appears to be the federal government’s turn to also test the blockchain’s disruptive potential.
“While the ubiquitous adoption of distributed ledger technology is yet to occur even in the financial services sector, its widespread deployment in the future, across multiple sectors, is distinctly possible and could deliver significant productivity gains across the economy,” Data61 said.
Data61’s study for the government will be led by an internal blockchain research team headed by Liming Zhu and Mark Staples, with strategic foresight input from Stefan Hajkowicz from the Data61 ‘foresighting’ team.
It will “explore the potential benefits or productivity gains for the Australian economy; the skills Australia might require to become a global leader as blockchain technology becomes more prevalent; as well as potential legislative and regulatory implications such as privacy consideration”.
Hajkowicz said a number of potential ‘proof of concept’ projects will be evaluated in conjunction with industry experts and across government.
“There are currently a few potential areas where we could explore opportunities – such as sharable registry information, verifiable supply chains and assessment of aggregate risk exposure in the financial services sector,” he said.
“In fact, there are also potential applications for this technology that extend well beyond the financial industry, and we are excited to explore, develop and apply the technology in both financial and non financial industry, in consultation with industry and government.
“Deployment of such technology could be most promising in government delivery applications.”
After consulting and evaluating suitable proof of concepts, Data61 said that an “agreed proof of concept trial will be developed to demonstrate the impact of the blockchain technology.”
Although at the outset of the study, Data61 believed the technology promised plenty of potential to help governments manage money.
“The keeping of accurate ledgers has for centuries been critical to both the operation of government and business,” the research firm said.
“They record details about assets, including available money and property, as well as any transactions that have occurred.
“This capability has become more sophisticated through the rise of information technology.”