Top 4 accounting firm turns to Ethereum for blockchain-based business contracts

Big Four accounting firm Ernst & Young (EY) unveiled on April 17 its new service for managing enterprise contracts via blockchain technology, called OpsChain Contract Manager (OCM).

The tool is designed to manage complex multi-party business agreements with enhanced security and privacy via blockchain technology. The service currently runs on the Polygon proof-of-stake (PoS) blockchain and is planned for a future upgrade to the Ethereum mainnet.

OCM

OCM is designed to facilitate the secure handling of business contracts on a public blockchain, ensuring privacy by using zero-knowledge proofs to maintain contract integrity and confidentiality, while also improving time efficiency and reducing costs .

It integrates with existing business systems via a standardized API and supports various contract types, including volume purchasing agreements and pricing models that rely on market data feeds.

While the service is currently promoted as running on Ethereum, it actually uses Polygon PoS to take advantage of the lower transaction fees that appeal to EY’s industrial user base, based on a report from the Block.

Paul Brody, head of EY’s blockchain division since 2016, says Nightfall – the technology behind the service – comes from Ethereum and has been tested on its test network. The upcoming update will port Nightfall to Ethereum’s mainnet and may include a Layer-3 upgrade to improve scalability and functionality.

Benefits of public blockchains

Brody also commented on the operational benefits of the OCM, noting that contract automation can significantly reduce cycle times and administrative costs.

He highlighted the scalability and neutrality benefits of deploying on a public blockchain, which means no single party has control over the network. Brody also noted that the future of enterprise blockchain applications is increasingly leaning toward public blockchains, as they offer superior privacy and transparency compared to private blockchains.

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The development comes in the wake of increased adoption of blockchain by major financial players. Notably, BlackRock recently launched a tokenized fund on Ethereum, marking an important step toward institutional involvement in blockchain technologies.

With the introduction of OpsChain Contract Manager, EY aims to improve the way companies manage contracts and improve process efficiency and transparency through blockchain technology. The initiative positions EY as a pioneer in integrating blockchain into conventional business practices, and sets a benchmark for the industry’s movement to embrace this technology in routine operations.

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