Italy partners with Algorand to become the first EU country to adapt banking systems with Blockchain
Italy has chosen the Algorand blockchain to make improvements to its existing banking systems from 2023. This officially makes Italy the first member state of the European Union (EU) to combine blockchain with its financial and insurance systems. The blockchain technology, which also provides the underlying technology used by cryptocurrencies, is now being explored by several countries to increase transparency in the banking sector.
Essentially, Algorand will support an upcoming digital guarantee platform in Italy to issue bank and insurance guarantees on blockchain, a digital ledger technology (DLT).
Insurance or bank guarantees are goods promised by banks or insurance companies to mitigate losses in the event of a loan default. A blockchain spin on the issuance of these guarantees could make the records more immutable and therefore more transparent.
“Our goal is not only to help Italy recover from the economic impact of COVID-19, but also to excel through innovation and leadership. Our ecosystem projects aim to help generate strategic platforms supported by Algorand. We selected Algorand for its unparalleled level of security among permissionless DLTs, and for its durability,” said Federico RajolaProfessor at the Research Center for Technologies, Innovation and Finance of the Catholic University of Milan (CETIF) in a press release.
Members of Algorand, the Bank of Italy and the Italian insurance authority IVASS met in Milan this week to discuss blockchain use cases in the banking sector. More than 30 financial organizations also participated in this meeting. The official Twitter handle of the Layer-1 blockchain platform announced this development on Tuesday.
Earlier this year, the Italian Ministry of Economic Development planned to invest $46 million (approximately Rs. 360 crore) in grants to develop projects around blockchain technology, artificial intelligence (AI) and the Internet of Things (IoT) .
This month, Italy proposed a crypto law bill that would allow the country to levy a 26 percent tax on crypto profits over $2,000 (roughly Rs. 1.62 lakh).
The Algorand-backed Italian platform is expected to release in 2023.
Released in 2019, Algorand is a green, proof-of-stake (PoS) blockchain. The developers of the blockchain claim to enable the convergence between decentralized finance (DeFi) and traditional finance.
Recently, the blockchain has also been chosen by the government of Maharashtra in India to store and support health data as NFTs.
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