IBM and Scentre Group, a company that manages shopping centers, have teamed up with an association of Australia-based financial services companies in launching a pilot program that encodes retail lease bank guarantees onto a private blockchain, according to an IBM press release.
With participation from organizations including ANZ, Commonwealth, and Westpac banks, Lygon was launched on the 3rd of July to digitize data collected from their initial test group of Scentre Group lease holders throughout Australia.
The expectation is to be able to reduce the validation time required for banks to issue each guarantee, to as little as a day, with the use of the Lygon platform. Current practices take as long as a month when issued on paper.
The Lygon backers have also stated that digitization can reduce the risks associated with errors and fraud across the billions of dollars in bank guarantees. To operate their stores and secure such a lease, Australian retailers are required by law to have a bank guarantee.
If the pilot becomes successful, all bank issuers, lease applicants, and beneficiaries will be offered access to the Lygon platform. Research expansions into other industry use-cases may also be considered by the five founding members.The Lygon project constitutes one of the latest blockchain-based systems created as a solution for bank guarantees. The Belarussian Central Bank approved the use of blockchain-based services of this kind back in 2017, and in 2018 Standard Chartered previously developed a partnership with Siemens (SIEGY) for a pilot program in trade finance bank guarantees.
With the involvement of IBM, Westpac, ANZ and Scentre Group, a similar pilot was concluded successfully in 2017, according to IBM. During that time, the association decided that for them to be widely adopted by the industry, the project “needs to be discussed and scaled with a broader range of participants.”
Lygon 1B Pty Ltd, a company with the joint ownership of the five founding members will be handling the operation of the Lygon platform, and the pilot will run for eight weeks.
Dennis Consorte has an appetite for news and information about cryptocurrencies, blockchain, IoT, fintech, adtech, martech and other technologies. He also has over 20 years’ experience in digital marketing and content strategy.
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