- The Bank of Italy has launched an initiative to integrate blockchain technology into the country’s financial system.
- The central bank has partnered with Polygon Labs and Fireblocks to enable banks and financial institutions to experiment with tokenised assets.
- The country’s largest banking group Intesa Sanpaolo, with more than $1 trillion in assets is part of the project.
The Bank of Italy has announced a partnership with leading Ethereum scaling protocol Polygon and decentralised finance platform Fireblocks. The Italian central bank will collaborate with the two web3 companies to integrate blockchain technology into the country’s financial system.
Several central banks across the world have expressed their desire to embrace blockchain technology for improved efficiency and security in financial transactions. Some countries including China have already launched Central Bank Digital Currencies (CBDCs) as part of integrating blockchain technology into their financial systems.
Commenting on the partnership, Imanuel Baharier, general manager of Cetif Advisory, said in a statement: “We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities as well.”
Cetif Advisory is a financial research and consulting firm that spun off from the Università Cattolica del Sacro Cuore of Milan’s Cetif Research Centre. The firm will take the lead in partnership with Polygon Labs and Fireblocks to develop a platform that will be used to integrate the country’s financial system into the blockchain.
According to a press release on Wednesday, Milano Hub, the Italian central bank’s centre for developing innovative ideas in finance, will support the development of institutional DeFi for the Security Token ecosystem for six months.
Financial institutions and banks that integrate their systems with the platform will be able to experiment with tokenised digital assets and execute transactions on a decentralised platform securely and within the financial regulatory framework.
Like several other central banks, the Bank of Italy has no plans to commercialise blockchain technology initiatives at this time.
Although CBDCs have been tipped to eventually replace local currencies, central banks that have announced their plans indicate that they are more leaning towards using CBDCs for settlements rather than as an exchange and store of value.
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