Last week, Australia’s Select Committee on Financial Technology (fintech) and Regulatory Technology (regtech) conducted a public hearing on the work and research that is being conducted. One area of interest discussed was two blockchain programs being funded by the government.
The first project is for regtech startup competitions, and the other involves two pilot projects that aim to reduce the cost of regulatory compliance. Funding for the programs is coming from the A$800 million ($618 million) Digital Business Plan set by Australian Prime Minister Scott Morrison six months ago.
A$11.4 million ($9 million) is allocated to the first project. It aims to enable startups to pitch ideas and, if successful, develop trials and potentially commercialize a blockchain-based regulatory solution. The committee is identifying startups in Australia that might be interested in the program and will create four different challenge areas for them. The SMEs will propose a plan on how to address the challenge. Some will be awarded a grant of A$100,000 ($77,300) to develop a feasibility study for their solution. Of those, the committee will select a few to develop trials to implement the solutions. The program targets one of the core aspects of the National Roadmap: to support startups.
For the two blockchain pilots addressing regulatory compliance, a budget of A$6.9 million ($5.4 million) has been allocated. One pilot relates to critical minerals and the other with food and beverage provenance. Both industries require extensive compliance auditing and developing more efficient and trustworthy methods to ensure regulatory compliance will likely lead to a shift in how auditing is conducted.
One of the Senators making the inquiries, Senator McDonald, was particularly interested in how blockchain solutions can reduce compliance costs. Often one of the most beneficial aspects of blockchain in compliance solutions is that it enables transactions and physical items to be trackable and traceable, which hinders opportunities for fraud and human error. Solutions enabling significantly lower costs are likely to become commercialized in the regulatory technology industry.
The National Blockchain Roadmap was mentioned during the hearings. The Roadmap has four working groups exploring potential uses of blockchain in supply chains, credentials, cybersecurity, and regtech.