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Herbert Smith Freehills has joined forces with CSIRO’s Data61 and IBM to build Australia’s “first cross-industry, large-scale, digital platform” enabling Australian businesses to utilise the IBM blockchain platform and implement blockchain-based smart legal contracts.
The new pilot program being launched by HSF, CSIRO’s Data61 and IBM, is Australian National Blockchain (known as ANB) – a platform that will enable companies to join a network to use digitised contracts, exchange data and confirm the authenticity and status of legal contracts.
Smart contracts facilitate the transparent transfer of digital assets (such as money, property, shares) and act similarly to traditional contracts except they are able to enforce agreed-upon obligations automatically.
Meanwhile, blockchain enables permissioned sharing of an immutable record among parties to create consensus and trust and can empower trading parties to collaborate and establish a single shared view of a contract without compromise on details, privacy or confidentiality.
Herbert Smith Freehills blockchain and smart legal contract lead Natasha Blycha commented that “technologies like blockchain are set to transform the legal industry and the wider business landscape as we know it.”
She noted the technology as presenting “a huge opportunity for agile and forward-thinking firms,” and highlighted the potential for deliverance of “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,” she said.
IBM Global Business Services’ vice president and partner for cognitive process transformation Paul Hutchison said 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.”
The technology enables Australian National Blockchain to be the first platform of its kind to be publicly available to all Australian businesses. The service will give organisations of all sizes the opportunity and ability to use blockchain-based smart contracts which are designed for Australian legal compliance to trigger processes and events. Smart clauses within the contracts have an ability to record external data sources, enabling clauses to self-execute if specified contract conditions are met.
For Data61, which last year delivered comprehensive reports for Treasury on the adoption of blockchain technology across the Australian government and industries, it is “a significant opportunity for Australia to create productivity benefits and drive local innovation,” said senior research scientist Dr Mark Staples.
Dr Staples said Data61’s independence and world-leading expertise will aid in catalysing the creation of digital infrastructure for a digitally-enabled future for Australian businesses.
“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,” he said.
Herbert Smith Freehills, Data61 and IBM will first test the concept as a pilot project, with regulators, banks, law firms and other Australian businesses invited to participate in the pilot from the end of the year.
Pending Australian success, the consortium’s plan is to introduce the technology to other markets.
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