Law firm Herbert Smith Freehills, CSIRO’s Data61 and IBM have formed a consortium to build a new blockchain-based digital platform to manage digitised contracts, exchange data and confirm the authenticity and status of legal contracts.
Known as the Australian National Blockchain (ANB), the consortium says the new platform will represent a significant new piece of infrastructure in Australia’s digital economy and will be suitable for use in any industry.
Designed for legal compliance, the platform will enable organisations to digitally manage the lifecycle of a contract, not just from negotiation to signing, but also continuing over the term of the agreement, with transparency and permissioned-based access among parties in the network.
Built on the IBM Blockchain Platform, the nationwide platform will allow Australian businesses to use smart contracts, digital rules that execute specific actions when predefined conditions within the blockchain are fulfilled, removing the need for a third party.
In more advanced use cases, smart contracts can be combined with the Internet of Things (IoT) which has the potential to streamline transactions associated with physical goods. For example, sensors could record the time and date of a delivery on the blockchain and trigger a smart contract which would automatically notify the bank that terms have been met to provide payment.
The consortium partners Herbert Smith Freehills, Data61, and IBM will first test the concept as a pilot project, and are already working with another leading Australian law firm to bring the ANB to market.
Going forward, 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.
“Technologies like blockchain are set to transform the legal industry and the wider business landscape as we know it,” Natasha Blycha, blockchain and smart legal contract lead, from Herbert Smith Freehills 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.”
Dr Mark Staples, senior research scientist at CSIRO’s Data61 said blockchain presents a “significant opportunity for Australia to create productivity benefits and drive local innovation.”
“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,” Staples said.
Should the Australian pilot be successful, the consortium intends to roll out the technology to other markets beyond Australia.
“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,” Paul Hutchison, Vice President and Partner, Cognitive Process Transformation, IBM Global Business Services said.