The federal Treasury department and CSIRO's digital arm Data61 will team up to undertake a review into the potential of the blockchain distributed ledger technology for both the public and private sectors.
The pair's review will span the next nine months and will look at case studies of blockchain technology and how it could be applied in Australia, with an eye to productivity gains.
It will also consider the skills needed for Australia to become a global blockchain leader as well as any legislative and regulatory implications, like privacy.
The review is intended to result in practical use cases where blockchain technology can be tested in both government and industry.
Blockchain underpins Bitcoin and offers a transparent, distributed ledger to record financial and other transactions.
Banks especially are interested in the technology given its lower costs of operation for the verification of transactions, as well as its improved speed and security compared to legacy financial processes.
Data61's dedicated blockchain team, headed by Liming Zhu and Mark Staples, will lead the review with help from Data61 strategic foresight executive Stefan Hajkowicz.
Hajkowicz said there were already potential use cases for blockchain technology in "sharable registry information, verifiable supply chains and assessment of aggregate risk exposure in the financial services sector".
“In fact, there are also potential applications for this technology that extend well beyond the financial industry, and we are excited to explore, develop and apply the technology in both financial and non‑financial industry, in consultation with industry and government," he said in a statement.
“Deployment of such technology could be most promising in government delivery applications."
Once suitable proofs of concept have been agreed on, a trial will commence to demonstrate blockchain's impact on the particular use case.
Australian government and industry are currently exploring the potential for the technology underpinning the Bitcoin digital currency within their operations.
The Australian Securities Exchange has committed to base its new post-trade platforms on distributed ledger technology after making a minority investment in fintech firm Digital Asset.
Australia's banks are participating in the global R3-led initiative to trial ways blockchain technology can be used in financial markets, and are currently testing a system for trading fixed income.
And overseas, the British government plans to use blockchain as a platform to monitor and control state grants.