The Bank of Italy will use the Algorand blockchain to develop “Digital Guarantees”

Finextra reports that the Bank of Italy has chosen the Algorand blockchain to develop an open Digital Guarantee platform. He will do this together with the Research Center for Technology, Innovation and Finance of the Catholic University of Milan (CETIF).

As planned by the Bank of Italy, the platform will serve the country's markets, which are aimed at supporting banking and insurance operations. It is noteworthy that in 2021, more than 50 insurance companies participated in the project using DLT distributed ledger technology that supports digital guarantee.

As a result of the tests carried out, more than 350 contracts were concluded by insurance companies. The collateral for the signed agreements ranged between €10,000 and €1,400,000.

“Digital guarantees” are supposed to significantly reduce the incidence of fraud in the open spaces of contracts concluded with insurance companies. The first pilot project showed satisfaction with the use of blockchain technologies. According to experts, distribution of the registry can limit the actions of fraudsters by 30%.

At the same time, operating expenses have become much lower. Resource savings were 10%, 20%, 30%, 40%, 50%, and even more, depending on the specific situation and the number of transactions processed.

According to the organizers of the project, the new Digital Guarantees platform will be fully launched at the beginning of next year. The launch could be the first time in history that a country from the European Union will use blockchain technology for banking and insurance guarantees.

Earlier, UnionBank, which serves customers in the Philippines, announced the beginning of the gradual integration of the blockchain system. Their goal is to optimize the activities of small and medium-sized enterprises. In addition, UnionBank wants to conduct various experiments with the metaverses.