Australian banks, IBM to test retail financing by blockchain

Australia’s three biggest banks said they will test a new bank-guarantee platform for shopkeepers that uses a shared database, claiming the project would mark the world’s first use of blockchain technology to process retail financing.

Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group Ltd are teaming up with local Westfield mall owner Scentre Group to test the use of IBM software to process financing contracts on the same network.

Retailers use guarantees, typically issued manually and on paper, to assure their landlord – Scentre, in this case – that they can pay their rent regardless of sales. The banks running the trial believe switching to blockchain could cut processing time to a day from a month and reduce the risk of fraud.