Laying the Foundations: How Blockchain is Transforming Payments in Construction

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This is a deep dive into the NotCentralised led pilot project for the RBA and DFCRC test of an Australian Central Bank Digital Currency (CBDC) and featuring Digital Mutual, Hedera, Zerocap and HSF. It marked a historic milestone as it represents the first construction industry payment to be processed through a CBDC-backed system, heralding a new era of trust, transparency, and efficiency in the sector. In this article, we highlight the origins of the RBA pilot project, the work we performed and the real-world outcomes as well as a glimpse down into the smart contract layer showcasing the work performed.

Background and Problem

Traditional construction payment processes are often mired in inefficiencies and risks, with long supply chains exacerbating the problem. Multi-party transactions can lead to disputes and increased costs, raising the risk of project failure due to working capital shortages.

A recent ABC’s Four Corners video (see below) highlighted issues in this industry that contributes significantly to the economy, yet is plagued by a crisis that leaves homes unfinished, trades unpaid, and suppliers in the lurch. This is the grim reality of the Australian construction industry where some operators like Metricon survive on razor-thin margins of 2% and where 30% of all Australian corporate collapses come from the construction industry.

At NotCentralised, we saw these challenges not as insurmountable obstacles, but as opportunities for innovation. We believe that blockchain technology can play a pivotal role in addressing these issues and why this was the perfect problem to solve as part of the RBA CBDC Pilot project. We demonstrated how different providers (including Hedera, Digital Mutual, and Zerocap and the law-firm, HSF) could come together to showcase the power of blockchain technology to solve these problems.

Key Figures

  • $229 billion AUD — size of Australian construction industry as of 2023 (link)
  • 1,709 — construction companies entering administration in Australia between July 2022 and April 2023 (link). Taking it back further to mid-2021 and the number of companies is 2,023 (link).
  • 1,700 — Projects in jeopardy when Porter Davis collapsed as Australia’s 13th biggest builder (link).
  • 36% — Year on year increase in number of building companies collapsing in 2023 compared with 2022 (link)

The CBDC Pilot Project: An Innovative Collaboration

The CBDC Pilot Project, backed by the Reserve Bank of Australia (RBA) and run by the Digital Finance Cooperative Research Centre (DFCRC), selected a range of use cases, among which the NotCentralised-led project stood out. The aim was to gain industry insights into innovative uses of CBDC and inform policy on the regulation of new business models. More details on the pilot can be seen here:

The NotCentralised-led use case focused on a commercial building renovation project involving one builder and one wholesale customer. Using a purpose-built app called TradesUnite, built by Digital Mutual, the team tackled the complexities of contract coordination, invoicing, and payment.

The Role of Blockchain and CBDC

The pilot project leveraged TradeFlows, a blockchain-based invoicing and payment management tool developed by NotCentralised. The project showcased the power of ‘composability’ in blockchain projects, demonstrating how multiple components could be combined in flexible and modular ways to create new business models.

TradeFlows provided transparency, efficiency, and security to the payment process using blockchain-based escrow accounts and smart contracts. These smart contracts automated payment releases based on agreed milestones, triggered by independent construction oracles. The escrows and smart contracts were coded on the blockchain, ensuring visibility and transparency.

The project also introduced a groundbreaking financial instrument — a stablecoin backed by CBDC. The CBDC served as proof of reserve, eliminating counterparty risk, and providing reassurance to industry participants about the stablecoin used. The RBA-backed CBDC demonstrated the commitment of the central bank to foster financial innovation, reduce risk, and ensure system stability.

The Success of the Pilot Project

The pilot project successfully showcased the potential of blockchain technology in transforming the construction industry’s payment process. The bathroom renovation job was carried out smoothly with the TradesUnite app and TradeFlows backend efficiently coordinating contracts, invoicing, and payment.

The project demonstrated how milestone-based, oracle-driven payments could transform the industry. For instance, the renovation project identified three milestones — screeding floors, waterproofing, and tiling. The completion of each milestone, verified by an independent oracle, triggered the smart contract to release the appropriate payment from the digital escrow account to the builder.

With the proof of reserves on the CBDC ledger, the payee was able to independently verify the payer’s capacity to fulfill payment obligations. This increased the trust between parties, reduced the likelihood of disputes, and streamlined the payment process.

Furthermore, there was actual work done on the back of this and in this case it was the refurbishment of the ground floor of a commercial office. You can see the final results here:

How Blockchain is Transforming Payments in Construction
How Blockchain is Transforming Payments in Construction

Zero-Knowledge Tech breakthrough for confidentiality during the project

Throughout the pilot project, NotCentralised recognised a critical need for maintaining transaction confidentiality. Despite blockchain transactions operating on a pseudonymous basis, they can still be viewed on-chain through a block explorer. While names and identities are obfuscated, previous transactions are available for perusal, and with enough correlations, it is possible for individuals to deduce transactional histories and associations. For businesses, in particular, this exposure can pose a risk due to the sensitive nature of financial data and the need for privacy in competitive marketplaces.

Recognising this, NotCentralised developed an innovative solution called NotVault. NotVault utilises Zero-Knowledge Proofs, a cryptographic protocol where one party (the prover) can prove to another party (the verifier) that they know a value x, without conveying any information apart from the fact that they know the value x. In the context of blockchain transactions, this means that the amounts involved in a transaction can be completely obscured to anyone outside the transacting parties, while still allowing them to verify that the transaction occurred.

By incorporating NotVault into the toolset, NotCentralised has successfully balanced the need for transactional transparency and confidentiality. It creates an environment where transacting parties have complete visibility into the details of their transaction while preserving confidentiality from external parties. This represents a ‘best of both worlds’ approach, providing the transparency and security of blockchain with the transactional confidentiality traditionally associated with private banking transactions.

NotCentralised effectively showcased the power and potential of NotVault during the pilot project. OC Interiors, the payer in this trade, deposited fiat with Zerocap corresponding to the work scheduled to be completed by Trade Collective. The payment structure was agreed upon with specific timeframes: 47.5% upfront, 47.5% upon completion, and 5% retained for any necessary maintenance. Once onboarded, we could proceed to utilise the programmability of TradeFlows smart contracts to fulfill the required payment terms of this job. In the appendix, we can see the transfer of payments occur between counterparties where the digital escrows kick in.

Normally, on a blockchain, whether on Layer 1 or Layer 2, every detail of these transactions would be visible — from the fiat onboarding by OC Interiors with Zerocap, to the extraction of funds by Trade Collective. Every financial movement, regardless of its confidentiality, would be open to scrutiny by anyone with access to the block explorer.

However, with the integration of NotVault, NotCentralised drastically changed this dynamic. While the onboarding of fiat by OC Interiors with Zerocap could be seen, the subsequent interactions with Trade Collective were obfuscated. Essentially, Trade Collective could withdraw their payment without any external entity knowing the specifics of their transactions, apart from Zerocap. This significant development brought the much-needed confidentiality to the traditionally transparent blockchain transactions.

Importantly, NotVault doesn’t detract from the innovative potential of blockchain. Instead, it enhances it. It preserves all the programmability features of blockchain, which enables automation and efficiency, while adding a new layer of transaction confidentiality. NotCentralised, with the introduction of NotVault, has effectively brought about a powerful fusion of confidentiality and the disruptive programmability of blockchain, paving the way for new use cases and opportunities.

In a broader context, this innovation could have far-reaching implications for a variety of industries where transaction confidentiality is paramount, further demonstrating the versatility and potential of blockchain technology. It showcases how careful protocol design can address and overcome one of the primary concerns businesses may have about adopting blockchain for their operations.

User Experience

Don Bruin, founder of Trades Collective, was one of the key participants in the pilot project. He shared his thoughts about the system, stating

“The TradesUnite app was intuitive and seamless to use. Being able to confirm that my client had the necessary funds before beginning work gave me peace of mind that I hadn’t experienced in my years of operation. After completing my tasks, I received my payment quickly and easily. This platform truly enhances trust and transparency in the construction business.”

The end client, Kel Matheson, founder of OIC Interiors, also found the experience very satisfactory. He expressed

“The TradesUnite app has streamlined our construction payment process like never before. We could swiftly confirm the completion of work and release payments, which traditionally would involve a lot of paperwork and delay. This platform is a game-changer in how we manage our construction projects.”

The Role of Each Consortium Member

In order to bring this project to fruition, a collaborative effort was required from various organisations each playing their unique roles. Zerocap engaged directly with the RBA and took custody of the CBDC, establishing a secure and credible foundation for the transactions. Digital Mutual, meanwhile, provided the front-end platform with TradesUnite, creating an intuitive and easy-to-use interface for users.

NotCentralised, with their TradeFlows solution, managed the backend by providing robust and secure smart contracts. These contracts were crucial in ensuring the funds were held and released appropriately, bolstering the overall transparency of the transaction. Hedera supplied the EVM distributed ledger technology, upon which the TradeFlows smart contracts are built, providing the necessary decentralisation and security for the system.

HSF helped us navigate the legal requirements for this pilot because whilst certain exemptions were granted by ASIC and AUSTRAC, there were still requirements that needed to be fulfilled.

Challenges and Future Development

After the successful completion of the pilot project, the next step is to broaden the adoption of TradesUnite among other builders, developers, and financiers in the construction industry. The transparency and security that the platform offers could revolutionize payment processes within the sector.

Furthermore, the potential of TradeFlows extends beyond construction. Any industry that has struggled with payment issues due to opacity or rehypothecation of funds could benefit from the application of TradeFlows smart contracts.

Technical Details

At the heart of this operation is the CBDC-backed stablecoin. The underlying concept is straightforward: for every stablecoin in circulation, there is an equivalent amount of CBDC held in reserve — effectively a 1:1 ratio. This proof of reserve approach means that the trust and stability of the RBA directly underpin the validity of the stablecoin, offering users the assurance that their digital assets have tangible backing.

For more information on the TradesUnite app, get in touch with the Digital Mutual team here

For more information on the TradeFlows protocol which houses the backend smart contracts enabling digital escrows, get in touch with the NotCentralised team here or

To learn more about NotVault, the open-source technology that enables confidentiality for blockchain transactions whilst still maintaining programmable payments, you can sign up for the beta access program here and learn about it here

Conclusion: A New Era in the Construction Industry

The successful completion of the CBDC Pilot Project marks the dawn of a new era in the construction industry, promising to revolutionize payment processes with the combined power of blockchain and CBDC. This innovative approach can transform the way we perceive and handle project payments, ultimately fostering trust, transparency, and efficiency in the construction sector. The future of construction lies in embracing this technological revolution, and projects like these will undoubtedly pave the way for more innovative use cases.

Appendix: Walking through the payments, step by step

In this section, we go through the various steps of the payments made between the counterparties. The screens here show the smart contract transfers that occurred with the TradeFlows protocol sitting on top of the Layer-C system where the former provides the digital escrows and the latter offers compliant smart contracts and ZK proof technology. These smart contracts run as part of the TradesUnite app we’ve built with Digital Mutual which was used for the purposes of this pilot project.

First up, we have the counterparties with wallet addresses:

  • Payer Counterparty making the payment and their public wallet address— Oxcd837
  • Payer Counterparty making the payment and their private address only visible to the other counterparty — 0x304199
  • Payee Counterparty doing the work and getting paid — 0x7b3fa

First up we have the Payer moving fiat and getting that converted into stablecoin for the value of the contract at $18k and this sitting on their public balance

How Blockchain is Transforming Payments in Construction

They next move that into their private balance where ZK proofs are enabled to stop outsiders seeing what they’re spending.

How Blockchain is Transforming Payments in Construction

Deal is created with initial terms of 47.5% upfront.

How Blockchain is Transforming Payments in Construction

Payee sees this in their assets with a notional value of $18k and nothing locked up yet.

How Blockchain is Transforming Payments in Construction

Payer agrees and can commit the 47.5% ($8k) into the digital escrow.

How Blockchain is Transforming Payments in Construction

When they look on their contract, they can see the $8k is now locked.

How Blockchain is Transforming Payments in Construction

The Payee can see that they now have $8k in their locked section of the contract available to them when they have completed the works.

How Blockchain is Transforming Payments in Construction

They can see their main wallet now too and it shows that they have $8k in locked assets but nothing elsewhere (as in this example, no other deals done).

How Blockchain is Transforming Payments in Construction

They can then choose to transfer the funds to their private balance but this would only be available once works completed.

How Blockchain is Transforming Payments in Construction

Once transfer is done, they can see they have $8k in their private balance.

How Blockchain is Transforming Payments in Construction

The Payer can then commit another 47.5% or $8k into the contract so that further works can be done.

How Blockchain is Transforming Payments in Construction

The Payer can see that they’ve locked in another $8k into the escrow account.

How Blockchain is Transforming Payments in Construction

And the Payee can now see that they have private balance amount as well as more funds in the locked account (e.g. the escrow).

How Blockchain is Transforming Payments in Construction

Payee can add the further 5% held off for repairs and maintenance.

How Blockchain is Transforming Payments in Construction

Payee has transferred locked digital escrow assets so now they have in their private balance 95% of the full contract amount.

How Blockchain is Transforming Payments in Construction

Payee adds the $900 leftover from their private balance to the escrow, locking in the final 5% of the deal.

How Blockchain is Transforming Payments in Construction

Once contract work is completed, payer sees nothing left to pay and nothing in escrow.

How Blockchain is Transforming Payments in Construction

Payee has moved all funds into their private balance.

How Blockchain is Transforming Payments in Construction

They now have the option of transferring the full amount out to a destination (in this case we’re showcasing our own address to keep the client address details private but client received the full funds in real life).

How Blockchain is Transforming Payments in Construction

Finally, the client has the opportunity to withdraw the full amount.

How Blockchain is Transforming Payments in Construction

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Mark drives innovation with his deep understanding of AI, blockchain, and data technologies. His experience spans over 15 years of contributions to finance, technology, and operational strategy across Australia, Europe, and North America.

In 2021, he transitioned from Head of Data and Technology at a leading Australian accounting firm to startups. Prior to this, he worked in equity and macroeconomic research in the capital markets space.

Mark brings a passion for data and insights to NotCentralised. His understanding of AI and blockchain technology is central to the development of workplace productivity and financial system modernisation products, including SIKE and Layer-C. Mark’s dynamic and solutions-focused methods enable the navigation of complex technological landscapes and new market potentials.

Mark holds an Executive Master’s and a Bachelor of Commerce. He led the creation of the Australian DeFi Association and serves on the advisory board for the Data Science and AI Association of Australia. His commitment to such communities demonstrates his enthusiasm for emerging technologies and vision of positive change through technology adoption.


Nick spearheads product strategy and institutional business development, leveraging a rich background spanning 23 years in capital markets and financial services across the UK, the US, and APAC.

In 2020, Nick transitioned into startups, bringing extensive experience in asset management and corporate advisory from roles including Director, Head of Australian Fixed Income at Abrdn and Managing Director, Head of Corporate Credit at Gresham Partners. His expertise extends to client management across the government and private sectors.

With a First Class degree in Law and Criminology and Chartered Financial Analyst experience since 2002, Nick is known for his energetic and creative approach, quickly appraising business models and identifying market opportunities.

Beyond his role at NotCentralised, Nick actively contributes to multiple startups and SMEs, holding various Board and advisory positions and applying his institutional expertise to early-stage ventures. Nick is fascinated by emerging technologies with significant societal impact and loves to immerse himself in nature.


Arturo leads product development and software engineering, applying over two decades of experience in technology, capital markets, and data science. With his years of programming expertise, Arturo smoothly transitioned into blockchain, AI, and machine learning.

Arturo has built and sold technology startups across Europe, following quant derivatives roles in global investment banks. His prior experience includes data projects for the NHS in the UK, Strategic Technology Advisor at Land Insight, and Senior Advisor to OpenInsight, where he built predictive models for vessel usage in commodity markets.

A mathematics and statistics graduate from Stockholm University, Arturo’s early grounding in logic problems and data manipulation techniques is evident in his practical applications. His work building equity derivative pricing models for Merrill Lynch and Royal Bank of Scotland showcased Arturo’s highly specialised skillset.

Arturo relocated from London to Australia in 2020. Beyond NotCentralised, his passion for technology and industry involvement extends to the Australian DeFi Association, which he co-founded, and regular contributions to the Data Science and AI Association.