The International Business Machine Corporation (IBM) together with the shopping center giant, Scentre Group, will be piloting a blockchain based platform, that enables the management of bank guarantees.
According to a Finextra report today, the new blockchain platform dubbed Lygon will use the efficiency of blockchain technology to process transactions regarding bank guarantee faster and also mitigate the risk of fraud and potential for errors.
Historically, bank guarantees are usually issued manually on paper, and it takes a very long time to process these guarantees. Moreover, merchants need bank guarantees to secure a lease over a retail tenancy.
Hence, the development today, which also includes a team of three notable firms, namely the Commonwealth Bank, ANZ, and Westpac, employs blockchain technology to modify the system.
In line with the 2017 proof-of-concept, the partners will embark in nearly two months pilot, that will involve leaseholders that are using live data and transactions with their outlets in Scentre centers.
The blockchain platform, Lygon will also be made available to all applicants, issuers, and beneficiaries as well as support, across other industries, according to the report.
“While the pilot is focussed on retail property leasing, the digitization of bank guarantees would benefit many other industries and geographies where bank guarantees, or standard letters of credit, are used,” Michael Thorpe, DD, future cities, institutional banking and markets, CBA, added.
Without a doubt, IBM has played a significant role in adopting blockchain technology to address issues in financial institutions.
In October, IBM was awarded a patent for outlining how Digital Ledger Technology (DLT) can be used in securing computer networks from various attacks.
In a similar development, IBM and three high-profile firms, Walmart, KPMG, and Merck partnered with FDA to create a proof-of-concept blockchain network that can modify the US Drug Supply Chain Security Act (DSCSA) and trace the distribution of prescription drugs.
Affiliate: Get a Ledger Nano X device for $119 so hackers won't steal your crypto.