/wholesale banking

News and resources on transaction banking, corporate banking and supply chain finance.
Bank of Italy selects Algorand to provide public blockchain platform for 'Digital Sureties' project

Bank of Italy selects Algorand to provide public blockchain platform for 'Digital Sureties' project

The Bank of Italy has selected blockchain technology from Algorand to support a new digital guarantees platform.

CETIF Advisory, the Research Center for Technologies, Innovations and Finance of the Catholic University of Milan, has been leading an ecosystemic effort to develop a blockchain-based open “Digital Sureties” platform that will serve the needs of Italy’s banking and insurance markets.

More than 50 market participants took part in a sandbox test of the use of DLT for digital guarantess last year, with over 350 contracts managed in four months having guaranteed sums ranging from €10,000 to €1.4m and an average amount of €275,000.

The pilot found that use of blockchain and DLT technology can lead to a reduction in fraud of around 30% and in operating costs from 10% to over 50%, depending on the number of transactions processed.

The new platform is expected to become operational in early 2023 and will be the first time an EU Member State enables 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 EU allocated roughly €200 billion to Italy, the largest allocation made to any country, to be used for co-grants and co-loans as part of the EU Recovery Plan.

Federico Rajola, professor, CETIF, says: “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.”

Comments: (0)