Using Smart Money makes it possible to automate the process. This avoids the issuance of receipts, bureaucratization and the risk of fraud
The sending of digital assets to charities will now be faster, more direct and more precise, thanks to the project in which the Commonwealth Bank of Australia (CBA) and the digital innovation center Data61 work, based on blockchain technology.
The Australian Federal Government is exploring the use of “smart money” to apply it in the National Disability Insurance Scheme (NDIS). The news was announced in October and confirmed on Tuesday, November 13th. Both companies have developed the “smart” or “programmable” money, i.e. a token that can be used to make payments according to certain guidelines.
With the “Smart Money” people are able to determine in which services they want to spend the token, at what time and its recipient, in order to manage the insurance payments, the budgeting, and management of the trusts, as well as the payments intended for non-profit organizations. Additionally, a distributed book ensures that there is an immutable and auditable record of expenses and circulation of money.
“This has been an important research project for understanding the benefits and limitations of blockchain technology in the context of conditional payment environments, such as the NDIS. Our use of blockchain added new kinds of programmable behaviors to the smart money in the prototype system. This automation and flexibility could reduce friction and enable greater innovation in many payment environments and unlock network-effect benefits”, says Dr. Mark Staples, Senior Principal Researcher in the Software and Computational Systems program at CSIRO’s Data61.
According to Staples, this could include more directly connecting citizens to public policy programs, “empowering people to optimize their spending through things like smart savings plans and smart diets, and reducing costs for businesses, including the potential for self-taxing transactions”.
How the idea was born
In the proof of concept, called “Making Money Smart” (PoC), ten people and several service providers for people with disabilities participated, using a prototype application adapted to the NDIS.
Data61’s representatives explained that the NDIS was chosen as a proof of concept because it “implies highly personalized payment conditions” because the beneficiary individuals and their caregivers receive specific amounts of funds to spend on different services provided by the plan.
The CBA model indicated that the system’s economic profitability would reach “hundreds of millions of dollars per year”. The Smart Money test uses a token solution that could be integrated for the future with the New Payment Platform of Australia.
Julie Hunter, the Commonwealth Bank’s Head of Government, says the trial results also show potential to reduce administration costs for disability service providers and the risk of fraud and accidental misspending.
In Australia, important initiatives are being developed to integrate blockchain technology in both the financial and health sectors. In this area, the Government plans to finance research on how to take advantage of blockchain technology as a tool for cancer detection.
This July, International Business Machines Corporation (IBM) signed a five-year agreement with the Australian government for approximately $ 740 million, to use blockchain and other new technologies to improve data security and automation in federal departments, including Defense and Internal Affairs.
By María Victoria Rodríguez