In an October survey of CIOs globally conducted by Gartner, 60 per cent of Australian and New Zealand chief information officers told Gartner they have no interest in blockchain technology. Almost half of CIOs globally said the same thing. Also in October, the high-profile planned use of blockchain by the ASX to replace their existing software for share trading has been delayed until 2023 in part due to the COVID-19 pandemic and stakeholders seeking more time for testing. Despite these apparent headwinds, 2020 has seen many Australian companies running blockchain (aka distributed ledger tech) trial projects or actively using blockchain technology. Australian startups are also offering a wide range of new services based on blockchain technology.
In 2020 there has been an explosion of applications of blockchain in the finance sector. A collaborative project between Westpac, ANZ, CBA, Scentre Group (which manages Westfield shopping centres) and IBM called ‘Lygon’ aims to use blockchain technology to digitise bank guarantees, eliminating fraud and reducing transaction times. A collaborative proof-of-concept project for the issue of a central bank digital currency (CBDC) using distributed ledger technology is being developed by CBA, NAB, RBA, ConsenSys and Perpetual. Eftpos Australia has partnered with French distributed ledger technology firm Hedera to conduct a proof-of-concept for micropayments using a blockchain-based Australian dollar stablecoin. A pilot of that program would allow for pay-per-view and pay-per-second content on streaming platforms. Startup Identitii has developed a tokenisation technology that allows both parties of a payment transaction to be verified in real-time. Chrono.tech is a fintech company focusing on HR-solutions for business based on blockchain systems. Immutable is an Australian company that develops online games using blockchain technology to give gamers real and “immutable” ownership over items in the games they earn rather than licenses over items in traditional online games.
Use of blockchain for contracting outside of fintech is also growing. For example, Telstra is working with international telecom companies Colt, PCCW Global, BT, HGC Global Communications and Telefonica (and others) to use blockchain to reduce inter-carrier settlement costs and time. Startups Power Ledger uses blockchain technology for trading renewable energy and environmental commodities and Civic Ledger uses blockchain technology to digitally connect citizens and industry with government.
The technology is also being applied in tracking and tracing of physical products, particularly across supply chains, in trade, and to support verification of claims of ethical or sustainable sourcing. World Wildlife Fund Australia and BCG Digital Ventures have collaborated to create a platform called OpenSC that uses blockchain to verify claims about sustainable and ethical products. Australian Border Force, Singapore Customs and the Singapore Infocomm Media Development Authority are also trialling blockchain technology to make the import and export of goods smoother, safer and more secure. Australian startups also have offerings that track, trace and evaluate supply chains using blockchain technology including for example AgriDigital, Lumachain, Fresh Supply Co, Laava, and Trust provenance. A South Australian based company called Entrust Global is using blockchain to trace the authenticity of wine and combat wine fraud.
How to explain, then, this apparent disinterest in blockchain technology among CIOs? It may be companies are waiting to see more tangible benefits from the use of blockchain before committing their attention spans. That strategy may lead to missed opportunities for some – only time will tell.
This article was co-authored with Francis Meehan.