Italy’s central bank is launching an initiative that will allow local TradFi participants to explore the possibilities of tokenized assets and conduct transactions using security tokens in a regulated environment.
The Bank of Italy (BoI) announced a partnership with layer 2 protocol Polygon and DeFi platform Fireblocks to develop the blockchain project Institutional DeFi for Security Token for the country’s financial institutions. This was reported by CoinDesk.
The initiative’s main goal is to enable institutional TradFi participants to operate in a DeFi environment while complying with regulatory requirements. The project will have no commercial objectives and is simply intended to provide local financial institutions with a tool to explore the use of security tokens in secondary markets.
The Bank of Italy’s innovation center, Milano Hub, will lead the project. The platform will be developed by Cetif Advisory, a consulting company that will coordinate the efforts of Polygon Labs, Fireblocks, technology developer Reply, legal and tax advisor Linklaters, and Web3 studio DVRS.
The DeFi platform will be available within six months for several commercial Italian banks, management companies, and a dozen financial institutions, including the country’s largest banking group Intesa Sanpaolo with total assets of over $1 trillion. The platform will allow them to conduct a number of experiments with tokenized assets.
The tokenized assets market has recently attracted the close attention of many TradFi participants. Thus, Mastercard announced the launch of a platform for testing tokenized assets, and the financial regulators of Japan and Singapore joined forces to study the impact of the technology of asset tokenization on financial stability.
