Three of the four largest Australian banks have formed a new company called Lygon to help digitize bank guarantees and transfer them to blockchain.
Bank guarantees are a formal agreement between a debtor and a financial institution. It guarantees that the debtor will pay the debt to the creditor on time under all circumstances. Recall that last year, Australian banks tested a system for issuing bank guarantees on the blockchain. Now banks are forming a company for a large-scale transfer of guarantees to the blockchain.
The project involves Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation. In addition to banks, Lygon is formed by IBM and the shopping center company Scentre Group. The fourth major Australian bank, National Australia Bank, also participated in testing, but withdrew from it in connection with the coronavirus pandemic.
Bank guarantees in Australia are now only paper-based and can take several weeks to prepare and deliver. Lygon will digitize bank guarantees and move them to the IBM Hyperledger blockchain, which will make it possible to issue and issue a guarantee in just a day. Lygon’s focus will be on digitizing commercial lease guarantees, which will save landlords time and money, and keep small businesses safe in the short term.
Note that in August, S7 Airlines began selling air tickets to corporate users on the Sberbank blockchain platform, while bank guarantees are also issued on the blockchain. In addition, Raiffeisen Bank also planned to use blockchain to issue bank guarantees.