Australian Banks Will Use Blockchain To Give Guarantees To Private Companies

The project, called Lygon, was launched with the participation of ANZ, Commonwealth and Westpac banks on the 3rd of July. Lygon servers will collect and digitize Scentre Group tenant test group data across Australia.

The companies hope that the Lygon platform will reduce the time for giving guarantees to one day. This service takes a month in the traditional paper form. These terms are based on the current bank practice.

Moreover, Lygon representatives claim that digitization reduces the risk of fraud and mistakes (a human factor). All Australian retailers need a bank guarantee when renting and operating their stores.

Depending on success of the pilot project, Lygon will provide access to the platform for all bank issuers, leasing applicants and beneficiaries. Five founding members can also extend researching in other industries.

IBM, a software and hardware company, hasn't given any comment on the project yet.

Lygon is a new blockchain-based system designed specifically for bank guarantees. The Central Bank of Belarus approved the use of the blockchain for this kind of service in 2017, and Standard Chartered, a multinational banking company, concluded a partnership agreement Siemens, the manufacturing giant, for a pilot project on a bank guarantee in the field of trade finance in 2018.

A similar pilot project with the participation of IBM, Westpac, Scentre Group and ANZ was successfully completed in 2017. At that time, the consortium came to a conclusion that the project 'must be scaled and discussed with a wider range of participants' in order to 'be recognized' in the industry.