Programmable money will be the trigger for governments to adopt blockchain
The original blockchain use case – bitcoin – involved making payments while circumventing government and banks. So there’s some irony that its latest local use case involves a big government agency and the country’s largest financial institution adapting the original blockchain to control how government payments are spent.
But blockchain innovation is full of surprises. Like the internet itself, what was briefly a rebellious technology is fast becoming mainstream.
The Australian Financial Review revealed today that Commonwealth Bank and the CSIRO’s Data61 unit have teamed up on a pilot that could see targeted payments made by the National Disability and Insurance Scheme (NDIS).
The blockchain will be a private version of Ethereum’s source code, running smart contracts that create “programmable money”. The plan is for this to sit on top of the Reserve Bank’s new, real-time payments system, the “new payments platform” (NPP), allowing the government to direct payments to NDIS participants for specific purposes in real time.
The emergence of programmable money as a government use case for blockchain comes after Data61 said in its landmark report on the new technology last year that “parties could attach policies on how parcels of money are spent or transferred, which would be self-enforced on blockchain as smart contracts”.
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