Major Australian players in science, tech and law and have joined forces to launch a blockchain platform for legal contracts.

Blockchain is a much-hyped, decentralised ledger which enables multiple parties to take a shared view of an agreement or contract, without compromising security or efficiency.

It’s best known as the basis for cryptocurrency transactions but is increasingly used to secure any type of digital contract.

Many in the resources industry regard blockchain as a solution to verify ethically-sourced commodities amid growing demand for transparency among consumers.

The Australian National Blockchain (ANB) is a joint initiative between the CSIRO’s innovation centre Data61, IBM and law firm Herbert Smith Freehills.

The consortium said the ANB will allow for a more secure and efficient process to manage business processes and enter into legal contracts.

“The ANB 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,” Herbert Smith Freehills said.

“The service will provide organisations of all sizes the ability to use blockchain-based smart contracts to trigger business processes and events.”

The initiative is good news for the ASX’s nascent blockchain sector, which is beginning to heat up again after a slump following the bitcoin meltdown.

Fintech Identitii recently launched the first ASX blockchain IPO in two years, aiming to raise $11 million ahead of a September listing.

Blockchain tech play Security Matters is also preparing a $5 million to $6.5 million initial public offering to advance a technology that can ‘mark’ any object in solid, liquid or gas form.

Pilot project

The ANB consortium said the project will first be tested as a pilot concept using an IBM blockchain.

The three partners are already working with another law firm to bring the ANB to market.

In due course, regulators, banks and other businesses will also be invited to participate in the pilot project, which is expected to start before the end of the year.

CSIRO’s Data 61 provided the following example of how blockchain can speed up business processes:

Construction site sensors could record the time and date of a delivery of a load on the blockchain and trigger a smart contract between the construction company and the bank that would automatically notify the bank that terms have been met to provide payment on that load delivery.

“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,” said Natasha Blycha, Blockchain and Smart Legal Contract Lead for Herbert Smith Freehills.

“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.”

CommBank blockchain project

Today’s announcement follows another blockchain initiative earlier this month, when Commonwealth Bank raised a $110 million dollar bond for the World Bank’s economic development fund using the Ethereum blockchain.

Last year, Data61 delivered two reports to the federal government, on how blockchain can be adopted by governments and the private sector.

“Our reports identified distributed ledger technology as a significant opportunity for Australia to create productivity benefits and drive local innovation,” said Mark Staples, senior research scientist at Data61.

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

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