AUSTRAC Testing Blockchain to Automate Fund Transfer Messages

The Australian agency is responsible to oversee the domestic crypto exchange.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is testing the usage of blockchain to automate fund transfer instructions.

As reported by ZDNet on February 24, the financial intelligence agency has teamed up with Swinburne University of Technology to build a blockchain-based prototype to test the potential of smart contracts helping multiple actors automate their international fund transfer instructions (IFTIs) reporting to Austrac. Banks, remitters, and casinos fall under AUSTRAC’s category of reporting entities.

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The report also detailed that the proof-of-concept (PoC) between AUSTRAC and the university commenced in December last year and is expected to last for around 12 months.

Moreover, apart from blockchain, the Australian agency is also exploring other technologies to automate IFTI reporting.

AUSTRAC’s partnership with the university was set in motion as Swinburne last month launched a global Blockchain Centre of Excellence along with IT consultancy firm Capgemini. According to the university, the center “will focus on advancing blockchain technologies, platforms, assets and systems to develop industry understanding and implementation of blockchain technologies.”

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“We see this technology as the key digital innovation platform supporting global supply chains, intellectual property, and trade across a range of industry sectors in the future,” Aleksandar Subic, Swinburne deputy vice-chancellor of research and development professor, said.

Licensing Crypto Exchanges

In Australia, AUSTRAC is responsible for overseeing the activities of crypto exchanges. The agency, in April 2018, launched a licensing framework for domestic cryptocurrency exchanges to ensure AML and KYC checks. According to the Australian ABC News, 246 cryptocurrency exchanges have officially registered with AUSTRAC to receive the operating license.

“We will not hesitate to take strong enforcement action where significant or wilful non-compliance is identified,” an agency spokesperson said.

Blockchain Gaining Momentum

Although blockchain is not mainstream yet, many established financial institutions are moving towards the decade-old technology. JP Morgan Chase recently revealed the ongoing development of JPM Coin to boost its settlement efficiency.

Last month, interbank payment and messaging network SWIFT announced the trial of a blockchain-based proof-of-concept for end-to-end payment tracking, payer authentication, and credit confirmation.

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