Italy Selects Algorand For Its Digital Guarantees Platform• December 13, 2022 4:01 pm • Comments
The price of Algorand (ALGO) just jumped significantly when it was announced that the blockchain protocol was selected by Italy to support its new digital guarantees platform.
This new digital guarantees platform is part of an overall initiative between the Bank of Italy and the Italian Insurance Authority IVASS that is aimed at finding ways to use blockchain technology to support bank or insurance guarantees.
If the initiative is successful, it could potentially transform the entire industry in the country which may influence many other countries do follow the same path.
The market of bank guarantees is a global industry that is essential for both lenders and debtors, but is unfortunately still dependent on centralized entities.
Right now, it is estimated that this new platform will come into fruition sometime next year in 2023 and will be the first of its kind so the fact that Algorand was selected for this initiative is a tremendous milestone for the project.
Just in: Algorand has been selected to be the public blockchain that will support an innovative digital guarantees platform in Italy.
— Algorand (@Algorand) December 13, 2022
“We selected Algorand because of its unparalleled level of innovation and security among permissionless [distributed ledger technologies], as well as because of its leadership in sustainability,” said Federico Rajola, professor at the CETIF, in the statement.
The move is part of a wider initiative rolled out by the EU, dubbed “EU Recovery Plan” where the EU allocated roughly 200 billion euros to Italy.
The program was launched to boost economic recovery following the COVID-19 crisis. Italy gained the largest allocation made to any country and was made to be used for co-grants and co-loans.
“It’s expected that a significant percentage of bank and insurance guarantees will leverage digital ledger technologies as part of Italy’s National Recovery and Resilience Plan,” according to the press release.
By using Algorand to power this new platform, it is expected that payments will become real-time or very close to real time which is a significant improvement compared to the amount of time it takes today.
Additionally, costs to perform the transactions will also be much lower which is why the idea is so attractive for many financial institutions around the world.
Compared to the traditional banking system, a lot of capital is lost due to intermediary fees and a lot of time is also lost.
Algorand solves all of these problems and was most likely selected due to its reputation as an “Ethereum-killer” as it provides fast, cheap, and scalable transactions.
— CRYPTOforCHANGE.algo (@CRYPT0forCHANGE) December 13, 2022
Near-instantaneous or real-time payments (RTP) across the blockchain cost businesses less to process when compared to wiring funds. They also take much less time than waiting for ACH payments to come through.
“The transit is without a doubt better than the current banking system,” Vecchiarelli told PYMNTS. “I push a button and get the crypto, get the confirmation, it’s just as easy as that.”
Vecchiarelli added that he envisions tools being developed to offer different payment methods across all-in-one dashboards as a normal evolution.
“It will be — it already is — most efficient for a company to be able to go to one dashboard and pay multiple bills using one or more methods. I’m very excited about what solutions are going to come out in the next year or two,” he said.
— サトシ 中本 (@AnonymusZK) December 13, 2022
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