The Data61 arm of the Commonwealth Scientific and Industrial Research Organization (CSIRO), in partnership with the Commonwealth Bank of Australia (CBA), has successfully trialed what they are calling a new “smart money” aimed at Australia’s health and welfare sector.
Data61 joined forces with CBA in October 2018 to explore new ways to leverage blockchain technology for creating a programmable tokenized monetary system. Per the deal, both entities picked the National Disability Insurance Scheme (NDIS) as their first case study to try out the proof of concept (POC).
Under the pilot, CBA and CSIRO focused on developing a prototype app backed by “smart money” to make payments under the NDIS faster, more efficient, and more reliable. The prototype was trialed with 10 NDIS recipients, along with a select few medium-sized disability service providers and carers associated with the CommBank Innovation Lab.
To quote the official announcement by CSIRO:
“The trial has demonstrated that smart money, also known as programmable money, could be used to help manage insurance payouts, budgeting and the management of trusts and charities in Australia.”
According to the CSIRO, the prototype app has been designed to demonstrate how smart money can provide participants with more choices and a greater control over their disability support services. Besides that, it added, this blockchain-powered solution could also play an instrumental role in removing paperwork, reducing administrative costs, and significantly cut down the possibility of fraudulent activities and accidental misspending.
Built using a “permissioned” Ethereum network with smart contracts overseeing where and when money from the government can be pent, the new smart money opens up new possibilities for efficient distribution of welfare funds to the eligible.
The CSIRO-CBA report, however, admitted that the proof of concept, at its current form, is not fully prepared to outperform existing channels. It acknowledged that as of today, a centralized database is likely to be notably faster than the PoC.
The report also admitted that while deploying the blockchain-powered solution will ensure cost reduction over the long run, the switch to the decentralized channel will require larger upfront costs.
“Careful consideration would also need to be given to the proposed governance arrangements for the system, including which parties should be processing nodes, who has visibility of the blockchain and who is eligible to set and modify conditions.”
The research team behind the project conceded that more analysis and trials are required to achieve more “refined solutions.”
Worth noting that a number of government and non-governmental organizations chipped in with advice, guidance, and feedback during the development of the smart money PoC. These include the Department of Human Services, Department of Social Services, Disability Advocacy Network Australia, The Treasury, Reserve Bank of Australia, Ability First Australia, and more.