The Bank of Italy has announced a new initiative to help financial institutions explore the potential of decentralized finance (DeFi) and tokenized assets.
The project, called Institutional DeFi for Security Token, will enable secure and compliant transactions using security tokens, leveraging the Ethereum scaling network Polygon (MATIC) and cryptocurrency custody platform Fireblocks.
The project is part of the Milan Hub, the Bank of Italy's innovation center promoting cooperation between academia, industry and regulators. The platform will be developed by Cetif Advisory, a consulting firm affiliated with Milan Università Cattolica del Sacro Cuore, in partnership with Polygon Labs, Fireblocks, Reply, Linklaters and DVRS.
The platform aims to provide a sandbox environment for Italian banks, asset managers and financial institutions to experiment with DeFi protocols and security tokens, which are digital representations of real-world assets such as stocks, bonds or real estate. Intesa Sanpaolo, Italy's largest banking group with assets exceeding $1 trillion, will also be involved in the project.
*Not investment advice.