The Commonwealth Scientific and Industrial Research Organisation's (CSIRO) Data61 is exploring the application of blockchain for use in the federal government's National Disability Insurance Scheme (NDIS).
Developing an app in partnership with the Commonwealth Bank of Australia (CBA), through the Making Money Smart trial, Data61 is toying with the creation of "smart money" -- or programmable money -- on a blockchain-based platform.
By attaching conditions, Data61 said the smart money knows what it can be spent on, who it can be spent by, and when it can be spent.
According to Data61, the NDIS was targeted as the first case study for the proof of concept as "it involves highly personalised payment conditions".
Under the NDIS, individuals and their carers can receive multiple different funding amounts, to be spent on different goods and services. As a result, Data61 said the blockchain-based app has been developed to allow them to find, book, and pay for services from NDIS service providers without the need for paperwork or receipts.
It is already being tested by NDIS participants and their carers.
"Programmable money represents an opportunity to re-envisage how we think about money and how payments function across the economy," CBA head of experimentation and blockchain Sophie Gilder said in a statement Tuesday.
Smart money is enabled by a blockchain token solution that could integrate with Australia's New Payments Platform, Data61 added.
Read also: What is Australia's New Payments Platform?
"This has been a really interesting research project into how blockchain technology can integrate with new payments technologies to provide more choice, control, and flexibility for conditional payments for NDIS participants and service providers," Data61 Senior Principal Researcher in the Software and Computational Systems program Dr Mark Staples said.
"We're particularly interested in the broader research opportunity around programmable money, because it should reduce friction in business transactions, and enable companies to create new business models and innovative ways of delivering and paying for products and services. This would benefit customers and reduces the administrative burden involved in managing payments."
The government's Digital Transformation Agency (DTA) in May revealed its intention to probe the use of blockchain for welfare payment delivery.
"Our plan is to look for use cases across the Commonwealth with an initial focus on the welfare payment delivery system, then working with our digital service standard, we'll conduct user research with a view to having a prototype by the end of next financial year," Acting CEO Randall Brugeaud told the CeBIT Australia conference in Sydney, noting also that a prototype could be in the market come mid-2019.
Data61's trial with CBA follows the bank in August completing the world's first bond delivered via blockchain, on behalf of its client, the World Bank.
According to CBA, the "$AUD Kangaroo bond", Blockchain Offered New Debt Instrument (bond-i), which uses a private Ethereum blockchain, was created, allocated, transferred, and managed through its life cycle solely using distributed ledger technology.
The two-year bond raised AU$110 million.
The bank also sent almonds from Australia to Germany in a blockchain-based supply chain trial in July.
Similarly, Data61 partnered with law firm Herbert Smith Freehills and tech giant IBM to build a blockchain-based smart legal contracts network, revealing in August the Australian National Blockchain will enable organisations to digitally manage the lifecycle of a contract, from negotiation through to signing, and continuing over the term of the agreement.