Three of the “big four” Australian banks are formed A startup called Lygon to digitize bank guarantees using blockchain technology.
Bank guarantees are an official contract between a debtor and a financial institution. It guarantees the debtor and the debtor that the debt will be paid on time under all circumstances.
Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation together with two other shareholders the Australian shopping center Scentre Group and the tech giant IBM, They form the company after a successful pilot test last year.
The last of Australia’s four major banks, National Australia Bank, also tested the technology last year, however, withdrew from the project in the wake of the ongoing coronavirus pandemicReported Review of finances September 1st.
Lygon’s main focus is on digitizing commercial lease warranties to save commercial owners time and money on operational processes while keeping small businesses safe in the short term, Lygon President said, Nigel Dobson.
Today’s bank guarantees are based entirely on paper and can take several weeks to be prepared and delivered. The five companies that support Lygon plan to digitize bank guarantees using IBM’s Hyperledger technology and make the shipment a one day process. The company is scheduled to go online in September.
Dobson said, “It’s coming at a time when some people have questioned the value of blockchain, but what this work is for us and our customers is that it solves a really big problem.”