Matthew Hale
Matthew Hale

Matthew Hale

26.02.2021. in Technology, Thought Leadership, Solutions

Submission to Senate Select Committee on Fintech and Regtech - Part 1

Part One: The Change Coming Ahead

Block8 recently provided a submission to the Australian Senate’s Select Committee on Financial Technology and Regulatory Technology. We focused our discussion on the use of distributed ledger technology (DLT) and its relevance to the Committee’s two public consultation papers that were released in 2020, as well as the Committee’s terms of reference in general.

The perspective we provided was one not just as technologists, or as blockchain specialists, but as a holistic product development company. Block8 not only provides professional services but also co-ventures with subject matter experts to design, build and commercialise full-stack and production-grade software solutions. We understand the importance of discussing these topics with a practical lens. In isolation, DLT presents several novel characteristics when designing a new software application, but we must look to integrate a number of related technologies and considerations in order to realise its full potential. This includes things like scalability techniques, rules as code, privacy-preserving technologies such as zero-knowledge proofs and secure hardware, and digital identity.

This blog series mirrors our submission to the Committee, covering the following points of discussion:

  • [1] Introduction, providing the context and motivation for our submission from our CTO;
  • [2] Challenges, discussing blockchain awareness and innovation culture;
  • [3] Opportunities, discussing the scope of Fintech and Regtech opportunities for Australia;
  • [4] Regulation, with a focus on the Consumer Data Right;
  • [5] Technology, covering the characteristics of blockchain and misconceptions; and,
  • [6] Conclusions, which summarise our present challenges and imperatives. 

If you’re in any way curious about the future of digital technology, particularly as it applies to Fintech, Regtech, or the future of the Australian digital economy, we hope you will find some value from this series.

As before, new blogs will be published each week, but if you want to read the full submission early, you can do so below.




The Change Coming Ahead

The natural progression of digital technology over the past quarter-century has been, overwhelmingly, centralisation. The rise of Cloud, SaaS, Big Data and Big Tech has manifested in corporate leviathans with user bases in the billions and valuations in the trillions. This monumental shift has created entirely new categories of business and unquantifiable improvements in transaction efficiency, delivering extraordinary benefits to anyone with an Internet connection.

This shift, however, seems precipitously close to its peak. It may have already passed. Cambridge Analytica brought into sharp focus the risks associated with the mass centralisation of data, and there is now a growing public awareness of the need to properly manage it. This is why both the practice and technology of data privacy are so important; we can neutralise the risks associated with information asymmetry that manifests from centralised software. The misappropriation of your attention that is at best a nuisance, and at worst a transgression of your cognitive liberty, can be altogether avoided.

Distributed Ledger Technology (DLT) decentralises the power of aggregated data because it offers us a way of building those same applications without the need to centralise its control. Instead, by using decentralised sources of truth, users of smart contract software can interact with each other directly. Network effects can be realised via data coordination, not data centralisation. DLT - or “blockchain” technology - is undeniably different to the software we are familiar with today, but its novelty will not prevent its advance. Quite the opposite, in fact. The defining feature of DLT is its unique ability to make value programmable, and ultimately deliver new digital infrastructures that are fundamentally cheaper, faster and fairer than what has come before. The greatest efficiencies - and the biggest prizes - will only ever be found through change that is genuinely fundamental, and these new software tools are already being mobilised to replace the most foundational mechanisms of trade in our economy.

Make no mistake, the Internet is getting an upgrade, and the core technology of decentralisation - blockchain - is here today. The associated techniques to ensure it is scalable and private have been demonstrated. Many systems are already live. Powered by distributed systems and brand new cryptography, entirely new forms of digital applications are being built for the early adopters. Having witnessed first-hand the pace and the brilliance of innovation in this space, it’s hard to not conclude that the hour of change draws near. 

We are therefore presented with an opportunity.

It’s no secret that technological innovation - both doing new things and doing existing things better - is a prime mover for jobs and economic prosperity. Better ways of working are always valuable. Even though we find ourselves presiding in a time of continuing economic uncertainty, our mandate is clear: complete an economic transition to a more balanced, secure and sustainable economy - one that steps away from relying on our resources for export, to one that steps toward relying on the Australian expert. In order to accelerate our national recovery from the pandemic, we should similarly look to technology to deliver domestic transformation. We must seek to work and govern with unprecedented efficiency.

This is a call to the curious and the concerned alike: we have an opportunity to take the lead in developing a fairer and more efficient digital transaction infrastructure in Australia - but it will only happen if we genuinely invest in understanding the application of these maturing technologies, right now. Government must ensure the way has been cleared so that our innovators can emerge. If successful, we can all expect new solutions to reduce operational and compliance costs, boost competition and consumer outcomes, and in turn, demonstrate how implementing policy can be done with ever greater efficiency, efficacy and agility.

The good news is that we already have the tools to get started. Australia is in a strong position to adopt a renewed digital focus; we have effective government and regulators, an educated workforce and a digitally-literate population - all currently effectively operating over a new national broadband network.

To us here at Block8, software solutions should always be designed from first principles where requirements are validated and assumptions are tested. We are made up of engineers, product and business experts. Although our customers come to us looking for solution novelty, solution practicality (and capital efficiency) is our highest priority, and yet despite our lean focus, it is very clear to us that among the precious few technologies that will fundamentally change our society, blockchain is one of them.

I trust that with this whitepaper, we can provide a unique and informed perspective on the profound economic potential of using blockchain technologies for a variety of novel financial and regulatory technology applications in Australia. Our discussion concludes with three key takeaways:

  • Far greater awareness of distributed ledger technology is needed across the economy.
  • Support from the Government must be resounding and unquestionable.
  • We must recognise and ameliorate systemic unintentional barriers in regulatory language.

Distributed ledger technologies offer a number of unique and valuable properties over more traditional, centralised approaches, and the forward challenge of digital innovation facing our economy will not be fully met without due consideration of what it can do for us.  Our objective is to help ensure Australia can avoid both hype and misconception, and help prepare us to capitalise on the change coming ahead.

Samuel Brooks
Chief Technology Officer
Block8 Technologies





Block8 would be happy to further discuss our thinking on any of the topics covered above, including specific detail on solution architectures and demonstrations of currently working distributed ledger systems, developed to address the challenges and opportunities outlined in the Issues Paper and our Response.

Our experts are also available to assist with research mapping the value chains for centralised and decentralised approaches, the identification of the highest-value areas for a consumer-centric data infrastructure, or working with the Government and other members of the industry in the development of pilot or production programs.


About the Author: 


Samuel G Brooks is Block8's Chief Technology Officer.

He is an expert in developing decentralised software products and has designed numerous solutions for startups, enterprises, the government and OpenTech since 2014.

Samuel regularly speaks at technology conferences, meetups and podcasts, and holds several advisory positions on technical industry boards and committees. He is also a heavy contributor to blockchain and fintech-related public inquiry and writes about the nature and benefits of distributed ledger technology on our blog.

Samuel holds a degree in Electrical Engineering from UNSW and has stayed close to both the code and the latest research ever since encountering Bitcoin in 2011.

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