The Bank of Italy has chosen blockchain technology from Algorand to help support a new digital guarantee platform.
CETIF Advisory has been leading an ecosystemic effort to build a blockchain-based open “Digital Sureties” platform designed to serve the needs of Italy’s banking and insurance markets. CETIF Advisory is the Research Center for Technologies, Innovations, and Finance of the Catholic University of Milan.
Over 50 market participants took part in a sandbox test of the use of DLT for digital guarantees last year, with at least 350 contracts managed in four months having guaranteed sums that ranged from €10,000 to €1.4m and an average amount of €275,000.
The pilot discovered that the use of blockchain and DLT technology can lead to a reduction in fraud of nearly 30% and in operating costs from 10% to more than 50%, subject to the number of transactions processed.
This new platform is expected to become operational in Q1 2023 and will be the first time an EU Member state allows the use of blockchain technology for bank and insurance guarantees.
The project is part of Italy’s post-Covid National Recovery and Resilience Plan (NRRP). The European Union allocated nearly €200 billion to Italy, the biggest allocation made to any country, to get used for co-grants and co-loans as part of the EU Recovery Plan.
Buy Crypto NowFederico Rajola, professor, CETIF, commented:
“Our goal is to help Italy not only recover from the economic impact of Covid-19 but also excel through innovation and leadership. Our ecosystemic projects are meant to help generate strategic platforms, such as the Digital Sureties platform supported by Algorand. We believe these platforms can and will dramatically contribute to the country’s competitive sustainability for the benefit of all.”
