Wine to banking: government looks to $260b blockchain opportunity

7 Feb 2020

A long-awaited national strategy for Australia's use of blockchain technologies is launching on Friday, focusing on the opportunities the technology presents to industries from finance to wine.

Minister for Industry, Science and Technology Karen Andrews said the five-year "blockchain roadmap" would lay the groundwork for researchers, start-ups and policymakers to get the best bang for buck in a sector set to be worth $US175 billion ($259.4 billion).

"I think what’s really exciting is the potential for blockchain to strengthen export opportunities, helping Aussie producers and manufacturers track their goods, which are in demand around the world because of our clean, green reputation," Ms Andrews said.

A blockchain is a "distributed ledger technology" where data is stored in a list of blocks, with additional blocks only able to be added if the other units "agree" it is valid.

It is central to everything from cryptocurrencies to smart contracts, though Australia is still developing regulatory standards for the sector and start-ups have previously said policymakers have been too slow to develop a national plan.

The blueprint suggests creating a "collaborative working model" whereby industry, government and the research sector join together to contribute funding and build use cases for blockchain in banking, education and agriculture.

The government has not yet allocated any funding to execute the blockchain roadmap.

The plan outlines the government's key priority sectors for applying blockchain technology. It points to possible savings that could be enacted across Australia's wine industry, particularly when it comes to wine exports and wine labelling by developing technologies designed to ensure the provenance of wine by creating a clear view of its supply chain.

The paper suggests starting full economic modelling on Australian wine exports and labelling and how blockchain could be applied to this.

The banking sector will also be a key focus, with the roadmap suggesting "know your customer" blockchains could be created so that banks and fintechs could more readily identify new customers without them needing to present 100 points of identification.

"There is potential for the process of switching banks to become as easy as a simple click," the strategy paper states.

Founders working in the blockchain space have expressed relief that there is finally a document highlighting priorities for the sector, though said there was much more work to do.

"It's been a monstrous 12 months — it's been really hard, but I'm really optimistic," Civic Ledger co-founder Katrina Donaghy said.

Ms Donaghy's start-up aims to bring blockchain solutions to government and governance spaces, including for digitising patents and for use in managing and trading civic entitlements like water rights.

She said more than 150 start-up representatives arrived in person to consultation meetings on the plan, and believes the number of people interested in blockchain strategy shocked the government.

However, Ms Donaghy said companies were still waiting for final standards relating to blockchain technologies to ensure the companies being built today were compliant with all relevant regulators.

"We were very slow on this but we're now filling the gap," she said.

"We’ve worked hard and we’ve created some amazing companies. It's great we finally have the policymakers on the road."

Publication: The Age