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

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

The tool is designed to manage complex, multi-party business agreements with enhanced security and privacy via blockchain technology. The service is currently running on the Polygon proof-of-stake (PoS) blockchain and is slated 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 utilizing zero-knowledge proofs to maintain contract integrity and confidentiality while also improving time efficiency and reducing costs.

It integrates with existing enterprise systems through a standardized API and supports various contract types, including volume purchase agreements and price models dependent on market data feeds.

While the service is currently promoted as operating on Ethereum, it actually utilizes Polygon PoS to capitalize on the lower transaction fees that are attractive to EY’s industrial user base, based on a report by the Block.

Paul Brody, the head of EY’s blockchain division since 2016, said Nightfall — the technology behind the service — originated on Ethereum and has been tested on its test network. The forthcoming update will transition Nightfall to Ethereum’s mainnet and might include a Layer-3 upgrade to improve scalability and functionality.

Benefits of public blockchains

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

He emphasized the scalability and neutrality benefits of deploying on a public blockchain, which prevents any single party from controlling the network. Brody also noted that the future of corporate blockchain applications is increasingly leaning towards public blockchains, as they provide superior privacy and transparency compared to private blockchains.

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

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

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