The central banks of various countries are looking to implement blockchain technology as it ensures more transparency and stability in the system as compared to the existing traditional network. Some are even thinking about launching the central bank digital currency (CBDC).
The new report unveils that the Italian banks are testing the distributed ledger technology (DLT) in their operations. The Italian’s central bank Banca d’Italia initiated a plan to apply DLT technology in banking operations across the country.
Plan by the Italian Banking Association
The banking association named as Italian Banking Association (ABI) initiated the plan to launch the blockchain platform “Spunta Banca DLT” to support the current domestic banking network in overcoming account discrepancies. After deploying blockchain, the information will be readily available instead of going through the entities one by one as in the traditional process. Similarly, the issue of pending transactions will be solved.
The respective DLT application is powered by R3’s Corda, known for providing blockchain solutions to business enterprises. David E Rutter, chief executive of R3, said,” This heralds one of the most significant real-world digital transformations in the interbank financial services sector to date.”
According to the managing director at R3, Charley Cooper, the country is facing the problem of interbank transfers from many decades which will fix efficiently after implementing the blockchain technology. “It removes the pain of reconciling mismatches that used to take days or weeks to resolve. Mismatches can now be spotted and reconciled immediately,” Cooper added.
All Italian Banks will join by the End of 2020
In the first quarter of 2020, the pilot phase tested by 18 banks which remained successful. The figure has now increased to 32 as many leading financial institutions have joined the initiative, including Banca Mediolanum, UniCredit, Banca Monte Dei Paschi di Siena, and UBI.
Heinrich Zetlmayer, the founder and general partner of Blockchain Valley Ventures, said:
“I am very excited by what central banks are now doing with digital currency because that brings a new legitimacy and security, as well a transaction currency for moving value on blockchain.”
“Banking regulators are getting comfortable with this technology. Having a digital euro, a digital dollar or Swiss franc might quickly unlock substantial new efficiencies. Blockchain is actually a very elegant software architecture for financial transaction processes,” Zetlmayer added.