The Commonwealth Bank of Australia (CBA) announced a blockchain-based prototype that it believes has the ability to raise verifiable development while allowing investment opportunities for environmental groups, government, developers, and landowners.

The prototype is developed in collaboration with BioDiversity Solutions Australia (BDS). It aims to create a tradable digital token, called BioTokens, which will be using blockchain as an underlying technology for enabling a transparent and efficient digital marketplace. The CBA said that BioTokens depict credits for the Biodiversity Offsets Schemes by the New South Wales government.

“This innovative prototype creates an accessible, transparent online marketplace where valuable biodiversity credits can be securely managed and traded using ‘BioTokens’ on blockchain — transferrable digital tokens which represent unique biodiversity assets,” said Sophie Gilder, CBA head of experimentation and commercialisation for blockchain, artificial intelligence, and emerging technology. “Our vision is that by digitising biodiversity credits and building a marketplace where they can be bought and sold, we can invest in and protect our natural environments.”

As per Rod Barnaby, the managing director of BDS, the company thought of this initiative to understand the challenges and advantages of Biodiversity Offset Scheme better. The same was expanded by the Australian government back in 2017.

The prototype needs developers to search and purchase biodiversity credits to start the development procedures. The credits can be handled by landholders who settle stewardship sites to secure biodiversity on their property.

As of now, there does not exist a transparent marketplace for landholders and developers for trading credits, which will be provided a platform by CBA.

“Our vision is that by digitising biodiversity credits and building a marketplace where they can be bought and sold, we can invest in and protect our natural environments,” Gilder added. “Creating a transparent, accessible, secure, and liquid market place for the creation and trading of biocredits, aligns with our strategic focus on sustainability, support for regional economies and exploration of emerging technologies to deliver tangible benefits to our customers. CBA sees future possibilities to extend the BioTokens concept to the management and allocation of other scarce resources, such as intellectual property or water rights.”

The “$AUD Kangaroo bond” Blockchain Offered New Debt Instrument (bond-i), was based on a private Ethereum blockchain, and was allocated, created, transferred, and operated through its life cycle only using blockchain technology.

The two-year old bond gained AU$110 million.

Previously, it also tracked the almond shipment on a blockchain from Australia to Germany.

The blockchain platform was supported by smart contracts, distributed ledger technology and the Internet of Things. It was applied to enable the trade testing that regulated 17 tonnes of almonds sent from Sunraysia in Australia, to Hamburg in Germany.

Recently, CBA had also announced a collaboration with CSIRO’s Data61, which supports the management of payment transaction through a legitimate Ethereum platform in Australia’s National Disability Insurance Scheme (NDIS). They use smart contracts that manage where and when the money from the government should be spent.

Following that, Data61 teamed up with IBM and a law firm called Herbert Smith Freehills to create a smart legal contracts network based on blockchain. The Australian National Blockchain (ANB) promoted the companies to manage the contracts digitally.

CBA also integrated with Westpac and ANZ bank, as well as Scentre Group, the Westfield shopping centres operator, in order to test a new blockchain-based bank guarantee platform.

All the three banks collaborated with IBM for Lygon, which is believed to have the potential of reducing the time of issuing bank guarantee, which normally takes a month.

Lygon operates on the blockchain platform by IBM, which is created on the Hyperledger Fabric. 

“It is the DTA’s current position that blockchain is an emerging technology worthy of ongoing observation. However, without standardisation and additional work, for many uses of blockchain, there are currently other mature technologies that may be more suitable for immediate use,” said the Australian government’s Digital Transformation Agency (DTA).

Peter Alexander, DTA chief digital officer, stressed on its potential, adding to the above that “for every use of blockchain you would consider today, there is a better technology — alternate databases, secure connections, standardised API engagement”.

“Blockchain: Interesting technology but early on in its development, it’s kind of at the top of a hype cycle,” he said.