Algorand, a Layer-1 blockchain technology, has been selected by various financial institutions and the Italian insurance authority IVASS to be the public blockchain that will support an “innovative digital guarantee platform” in Italy.
On December 13, 2022, Algorand joined hands with the Bank of Italy, IVASS, and more than 30 other financial institutions across the country at an event in Milan where it illustrated how bank and insurance guarantees can be issued on digital ledger technologies (DLT) aka blockchain. The event was hosted by CETIF, the Research Center for Technologies, and the Innovations and the Finance department of the Catholic University of Milan.
“We are proud and honored to be the public blockchain chosen by the Digital Sureties platform of Italy,” said Silvio Micali, Founder of Algorand Inc. “Through Algorand’s technology, we can help solve many critical issues faced by financial institutions and governments across the world today.”
The new blockchain-based open “Digital Sureties” platform, expected to become operational in early 2023, will serve the needs of Italy’s banking and insurance markets. Italy has become the first EU Member state to enable the use of blockchain technology for bank and insurance guarantees.
A guarantee provided by financial institutions such as banks and insurance firms refers to a promise that if a certain borrower fails to pay a debt then the financial institution will take care of the losses. Now, with the new platform, these guarantees will be issued on the blockchain making the records immutable and more transparent.
To give a boost to Italy’s National Recovery and Resilience Plan (NRRP) and as part of the EU Recovery plan, the EU has allocated 200B Euros to Italy which is to be used for co-grants and co-loans. So it is expected that a significant percentage of bank and insurance guarantees will leverage DLTs.
Blockchain, here, is the most suited solution as the technology provides fast, efficient, low-cost, immutable, and scalable data transactions and the most important of all is the transparency to protect against fraud which is a known challenge with bank and insurance guarantees.
“We selected Algorand because of its unparalleled level of innovation and security among permissionless DLTs, as well as because of its leadership in sustainability,” said Federico Rajola, professor, CETIF. “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.”
Algorand blockchain is popular among crypto investors around the world as it has experienced zero downtime since its launch in 2019. The Layer-1 blockchain is based on proof-of-stake (PoS) consensus and is considered green because of its low carbon footprint. Algorand offers immediate transaction finality, consensus and network-level security, and advanced smart contracts built for scalability.
To recall, the Government of Maharashtra, India also chose the Algorand blockchain to store the personal health data of citizens using the NFT (non-fungible tokens) technology.
