Demonstrating how blockchain technology can support supply chain solutions and help to ease regulatory burdens are the aims of two new pilot projects funded by the federal government.
The government is investing more than $5.6 million through the Blockchain Pilot Grants program to investigate the capability of blockchain to enhance the productivity and competitiveness of Australia’s critical minerals and food and beverage sectors.
Blockchain is a digital ledger system that records transactions such as the movement of goods through a supply chain in a way that is extremely difficult to change or “hack” because the information is duplicated across a network of computers.
The program aims to demonstrate the potential for blockchain to help businesses to save money and cut red tape by improving processes, such as tracking products throughout the supply chain, and transferring customer information.
Minister for Industry, Science and Technology Christian Porter said the projects would help to accelerate Australia’s adoption of blockchain technology and assist businesses to solve real-world problems.
“The Manufacturing Modernisation Initiative references food safety in the vision outlined by the federal government,” Mark Dingley, chairman of the Australian Packaging and Processing Machinery Association, tells PKN.
“Blockchain will play an increasing part in providing a secure platform of data exchange between trading partners, and ultimately, into the hands of consumers to provide proof of provenance and quality assurance, which will drive the connection between the physical pack and the increasing digital interaction.”
One of the recipients, tech consulting firm Convergence.tech, has been awarded around $2.7 million to automate key parts of the excise tax system.
It will leverage blockchain technology to help automate key reporting processes under the excise system, a commodity-based tax on goods, including beer and spirits.
This will help companies in the sector to reduce compliance costs associated with the creation, storage and transportation of their products.
Convergence.Tech, with headquarters in Melbourne and Canada, is leading a consortium including KPMG, Mills Oakley, the Australian Distillers Association and Spirits & Cocktails Australia.
Convergence.Tech CEO Chami Akmeemana tells PKN he had been part of a small group championing blockchain in Australia for the last five years.
“We started an association to fire-up the ecosystem and running hacks to show hands-on what it can do in regulatory environments. We have a great team and we’re excited to begin the discovery process and roll up our sleeves to trial a solution,” Akmeemana says.
The grant consortium will work with the federal government to automate key parts of the excise tax compliance and payment process, leveraging smart contract automation and an Australian dollar stablecoin. The goal is to help companies reduce the compliance effort and costs of the creation, storage and transportation of products.
Akmeemana said the AUD stable coin will help excise tax compliance but could also be used more broadly in Australia.
A second recipient of the Blockchain Pilot Grant, Everledger from Queensland, received $3 million to investigate how blockchain technology can be used to create a digital certification for critical minerals throughout the extraction and movement phases.
The grants will help companies in the sector to ensure adherence to compliance regulations and increase the demand for Australian products in global markets, while also simplifying the process and lowering costs.
The grants are funded under the Australian government’s Digital Business package, which was announced in the Federal Budget 2020-21, and directly align with the government’s National Blockchain Roadmap, which was released in February 2020.
