Algorand Blockchain Choosen by Italy to Improve Banking Process

Italy has selected the Algorand blockchain to enhance its current financial systems beginning next year. Italy will be the initial European Union (EU) member state to adopt blockchain technology in it’s banking and insurance infrastructures. Several nations are examining blockchain technology, which is also the core technology for cryptocurrencies, in an effort to boost financial sector openness.

Algorand will basically assist a future digital guarantees system in Italy that will offer bank and insurance guarantees using blockchain, a digital ledger technology (DLT). In the event of a loan failure, insurance or bank guarantees are products offered by banks or insurers to reduce damages. Incorporating blockchain technology into the issue of these assurances might make the data more irreversible and therefore fairer.

“Our objective is to assist Italy not just in recovering from the economic effects of the pandemic, but also in excelling via technological advancement and leadership. Our ecosystemic initiatives are intended to facilitate the development of Algorand-supported strategic frameworks. We chose Algorand due to its exceptional degree of security amongst permissionless DLTs and its scalability, stated Federico Rajola, professor at the Research Center on Technologies, Innovation, and Finance of the Catholic University of Milan (CETIF).

This week, representatives from Algorand, the Bank of Italy, and the Italian insurance body IVASS gathered in Milan to explore blockchain applications in the banking industry. Over thirty financial institutions also participated in this gathering. This was reported through the official Twitter account of the Layer-1 blockchain technology on Tuesday. Earlier in I January, Italy’s Ministry of Economic Development intended to spend $46 million (about Rs. 360 crore) in grants for advancing blockchain technology, Artificial Intelligence (AI), and Internet of Things (IoT) ventures.

This month, Italy submitted a draught cryptocurrency legislation bill that would impose a 26% tax on cryptocurrency income surpassing $2,000 in the nation. The Algorand-backed Italian platform is planned to be operational next year.

Algorand is an eco-friendly proof-of-stake (PoS) blockchain that was unveiled three years back. The blockchain’s inventors promise to allow the confluence of decentralized finance (DeFi) and conventional finance. Lately, the government of Maharashtra in India selected blockchain technology to retain and maintain health information as NFTs.