Three of Australia’s ‘big 4’ banks along with Scentre Group, which manages Westfield’s shopping malls, are joining forces to create a world-first blockchain platform.

The blockchain, to be known as ‘Lygon’, will be used to manage a bank guarantee system which gives landlords an assurance that retail tenants can pay their rent, regardless of sales.

The system is common throughout shopping malls across Australia but has previously been a heavily paper-based and complex process.

“While the pilot is focussed on retail property leasing, this technology has the potential to benefit many sectors and reduce the risk of fraud across billions of dollars guaranteed by the banks,” said Didier Van Not, Westpac’s manager of corporate and institutional banking.

Banks refuse to rule out cryptocurrency creation

While Lygon will initially be used to expedite the bank guarantee process by generating smart contracts and reducing the risk of fraud, bank executives are assessing the merits of adding a blockchain payments solution in the future.

Payments over the Lygon blockchain would require the creation of some form of cryptocurrency and ANZ’s head of digital banking, Nigel Dobson, admits such an advancement isn’t out of the question.

“If it (a cryptocurrency) made the platform more attractive, made it work faster and gave it some global scale, then we certainly wouldn’t rule out considering it in the future,” Dobson told Reuters.

IBM’s Blockchain technology will power Lygon, which went live Wednesday.

IBM has been making significant in-roads in the introduction of blockchain technology to big business across Australia.

In March, Australia’s largest independent grocery retailer announced it was using IBM blockchain technology to trace the origins of meat.