Algorand Chosen to Develop Bank and Insurance Sureties on Blockchain in Italy

Algorand, the blockchain platform on which the ALGO cryptocurrency is based, is designed to be secure, scalable, and decentralized, and a world leader in blockchain layer-1 technology, has been selected to be the public blockchain that will support an innovative digital bank and insurance surety bond platform in Italy.

The digital surety bond platform on blockchain is being developed by the Research Center on Technology, Innovation, and Finance at the Catholic University of Milan (CETIF) under the supervision of the Bank of Italy and the Insurance Supervision Institute (IVASS) from early 2020.

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The platform is expected to be launched in early 2023

In addition, is expected to be the first occasion when an EU member state uses blockchain technology with respect to bank and insurance surety bonds. It is expected that a significant percentage of these guarantees will be based on digital ledger technologies under Italy’s NRP. As we know, the EU has allocated about 200 billion euros to our country to be used for co-guarantees and co-loans under the EU recovery plan. These sureties are nothing more than a promise (by a lending institution) to cover a loss in case a borrower defaults on a loan. That, as an alternative to a surety bond or deposit to a vendor.

Federico Rajola, professor at CETIF, on Algorand, said he chose it because it has an “unparalleled level of innovation,” as well as for its “leadership in sustainability.” He added, “Our goal is to help Italy not only recover from the economic impact of Covid-19, but also to excel through innovation and leadership. We believe these platforms can and will contribute greatly to the country’s competitive sustainability for the benefit of all.”

Algorand, for its part, said it is an “ideal” fit for such a type of platform because of its “fast, efficient, low-cost, and scalable transactions, and its ability to provide protection against fraud!”

Algorand is a platform that overcomes the limitations of first-generation blockchain

Its founder is Italian Silvio Micali, a professor at the Massachusetts Institute of Technology in Boston and winner of the Turing Prize, a kind of Nobel Prize in Computer Science. Thanks to Pure Proof of Stake, the innovative consensus-building system, it enables the establishment of a highly expandable, decentralized, and secure digital transaction ledger, while Algorand Standard Assets (ASA) make possible the so-called tokenization (i.e., standardized digital representation) of any type of asset, including currencies, coins, and stablecoins. The company has built the first pure, open-source, permissionless blockchain protocol for the next generation of financial products.

Algorand’s core network became active in June 2019 and could handle nearly one million transactions per day as of December 2020. Investors in Algorand include Eterna Capital, an operator specializing in blockchain investments, founded in London in the spring of 2018 by Italian Andrea Bonaceto (also a well-known artist of NFT works) and three young former BlackRock analysts Nassim Olive, Asim Ahmad, and Mattia Mrvosevic.

Silvio Micali, founder of Algorand, about the project with CETIF, said, “We are proud and honored to be the public blockchain of choice for the Digital Sureties platform in Italy. Through Algorand’s technology, we can help solve many critical problems facing financial institutions and governments around the world today, bringing opportunity and inclusion to communities in need everywhere.”

Last September Algorand formed a partnership with Bocconi University aimed at fostering the development of the new Algorand Fintech Lab, directed by Claudio Tebaldi (see other BeBeez article). In January, on the other hand, Folks Finance, an Italian fintech that operates the leading over-secured lending protocol developed right on Algorand’s blockchain, closed a $3 million funding round (see other BeBeez article). It was led by Borderless Capital, the largest investor in the Algorand ecosystem, which has pledged to provide a steady flow of capital to the Folks Finance protocol liquidity pools.

In November 2021, on the other hand, Algorand and InfoCert, a certification authority under Tinexta, had entered into a partnership for blockchain-based digital identity, while in the previous March Siae (Società Italiana Autori ed Editori) had launched together with Algorand the tokenization of copyright.

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(Featured image by Shubham Dhage via Unsplash)

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