CSIRO’s Data61 will pilot test the blockchain technology that offers instant settlement between banks, and ASIC will create a regulatory sandbox for FinTech startups to prove-out their ideas. But the government’s budget for promoting Aussie FinTech is nonetheless very slim.
Blockchain technology is used by digital currencies such as Bitcoin. The digital ledger system eliminates the long settlement periods as money moves from one financial institution to another.
It is problematical for banks, in that it also wipes out their ability to extract value from the money while it floats around. But banks say the disadvantages are offset by far speedier transactions for customers and the potential for new products and services.
Meanwhile, ASIC will help FinTech startups test out their ideas with clients without necessarily clashing with sometimes outdated financial regulations through ASIC’s coming regulatory sandbox.
Data61 will pilot blockchain and undertake a review of where its adoption could benefit both government organisations and private enterprise.
The government is also eyeing greater efficiencies from electronic invoicing and will undertake an implementation study into the costs and benefits of adopting eInvoicing. The findings from the study will be looked at early next year.
The Federal government wants to build FinTech muscle here although the financial commitment so far to the FinTech cause is minor.
This year’s budget outlays just $200,000 to promote Australia internationally as a FinTech hub and also promote ASIC’s regulatory sandbox.
Global competition to be seen as a FinTech pioneer is fierce with Germany’s Berlin also positioning itself as a FinTech paradise.