Italy has chosen Layer-1 blockchain Algorand to support the development of an “innovative digital guarantees” platform for the country’s banking and insurance sectors.
With a launch date pegged for early 2023, this will be the first time a European Union member state has used blockchain technology for banking and insurance guarantees, according to an Algorand announcement.
Bank or insurance guarantees are when an institution that gives out loans promises to cover any losses if the borrower defaults on a loan. It functions similarly to providing a security bond or deposit to a supplier.
Algorand has said that blockchain technology is well-suited for a “digital sureties” platform because of its speed, efficiency, and scalability when dealing with data transactions. It also claims this can be done with low costs and protection against fraud.
The digital sureties platform is being developed by the Catholic University of Milan’s Research Centre on Technologies, Innovation and Finance (CETIF) as part of Italy’s National Recovery and Resilience Plan, a drive to boost Italy’s economic recovery in the wake of the Covid-19 pandemic.
Federico Rajola, a professor at CETIF, said Algorand was picked for its “unparalleled level of innovation” and its “leadership in sustainability”.
He added: “Our goal is to help Italy not only recover from the economic impact of Covid-19, but also excel through innovation and leadership.”
“We believe these platforms can and will dramatically contribute to the country’s competitive sustainability for the benefit of all.”
Earlier this year, Algorand partnered with world football governing body FIFA to become the FIFA World Cup Qatar 2022 official blockchain sponsor.
Want to learn more about blockchain from industry leaders? Check out Blockchain Expo taking place in Amsterdam, California and London.
Explore other upcoming enterprise technology events and webinars powered by TechForge here.