Australia’s largest bank, Commonwealth Bank of Australia (CBA), and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) have released the findings of their blockchain trial in the ‘Making Money Smart’ report. The prototype blockchain app was trialled on 10 participants and carers across the National Disability Insurance Scheme (NDIS), which highlighted potential use cases for expansion.
Dr Mark Staples, Senior Principal Researcher in the Software and Computational Systems program at CSIRO’s Data61, said “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.” Furthermore it represents an exciting governmental interest and commitment to the application of fintech.
How they programmed money
The technology involves tokenising government funds that are directed towards providing financial support to disabled persons under the NDIS. These tokens are grouped into the user ‘pouches’, which have policy contracts attached to them. The tokens are only transformed into transferrable ‘smart tokens’ or ‘smart money’ once the policy contract conditions have been met, which in this case is when the tokens are being used for approved services. The service provider then receives a pouch with the corresponding smart tokens (without any policy contracts attached) which represents a promise by the Australian Government to pay a denominated amount of AUD. In essence, this is an application of smart contracts to distribute government pensions via programmable money.
Why the money is ‘smart’
Although conducted on a tiny population of only 10 participants and carers, the results are promising. Participants estimated an average saving of 3 hours per week, whereas service providers estimated they would save between 0.3% and 0.8% of revenue. CBA modelling indicated that if the prototype was used Australia wide to distribute NDIS funds alone, the savings would be in the “hundreds of millions of dollars annually”.
Qualitatively, participants reported more choice and control over disability support services, the removal of paperwork and simpler access to financial support compared to their current provision of services. The report also highlights potential reduction of fraud and misspending as the money is ‘smart’ and knows who it can be spent by and what it can be spent on.
Potential use cases
Commonwealth Bank’s Head of Government and ADIs Julie Hunter forecasted that “The trial has highlighted that the technology could have [a] wide application across the government, business and not-for-profit sectors.” Some of these were highlighted in the report:

• Value-based healthcare. Eligible patients receive treatment from registered practitioners, and ‘smart money’ is automatically transferred to service provider from the government once certain conditions on the policy contract are met (ie. Blood sugar reduction by x%).
• Financial stimuli. After criticism of Australia’s stimulus package during the GFC, this prototype could be expanded to control what goods/services stimuli and rebates can be spent on, to ensure targets are being met.
• Smart diets. The policy contracts could contain restrictions on buying high sugar/salt foods and drinks, as the tokens would not materialise into ‘smart tokens’ if attempting to be used on non-desirable goods (cross referenced to a database). Another envisioned application would be to limit the amount that can be spent on non-desirable goods and services such as gambling and/or cigarettes.
• Insurance payouts. For examples of developed and developing insurance payouts based on smart contracts see our overview of smart contract developments in insurance provision.
• Not-for-profits. ‘Smart tokens’ could be used to limit the misappropriated of funds received to further social causes by limiting what they can be spent on.

by Sam Hodder, Research Analyst.