The Bank of Italy’s innovation hub, the Milano Hub, has chosen a decentralized finance (DeFi) project to help financial institutions explore DeFi and tokenized assets. The project, which involves Ethereum scaling network developer Polygon Labs and crypto custodian Fireblocks, will be supported for six months and aims to help traditional financial institutions to experiment with security tokens and execute transactions using DeFi rails in a safe, regulated manner according to a press release.
Cetif Advisory, a consultancy spinoff of the Università Cattolica del Sacro Cuore of Milan’s Cetif Research Centre, will lead the platform’s development, coordinating the efforts of Polygon Labs, Fireblocks, tech developer Reply, legal and tax consultant Linklaters and web3 studio DVRS. The project will involve Italian banks, asset managers and financial institutions, including the country’s largest banking group Intesa Sanpaolo.
We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities as well, Imanuel Baharier, general manager of Cetif Advisory, said in a statement.
Tokenization has become a popular trend in crypto as traditional financial institutions and digital asset firms are placing old-school instruments, including bonds and equities, onto the blockchain. A Bank of America report said that tokenization may reshape how value is transferred, settled and stored across every industry, making transactions faster, lowering costs and creating a more efficient financial infrastructure.
The initiative does not have plans for commercial use, per the press release.