Italy’s Central Bank Empowers Institutions With Polygon-Fireblocks DeFi Collaboration

Key Points:

• Bank of Italy partners with Polygon Labs and Fireblocks to develop Institutional DeFi for Security Token ecosystem.
• Italian banks, asset managers, and financial institutions to experiment with security tokens and DeFi in a secure, regulated manner.
• Tokenization reshaping how value is transferred, settled, and stored across every industry, creating a more efficient financial infrastructure.

Bank of Italy has taken a significant step towards the development of decentralized finance (DeFi) by partnering with Polygon Labs and Fireblocks.

The Milan Hub, the Italian central bank’s innovation centre for finance, will work with the two companies to create an Institutional DeFi for Security Token ecosystem that will allow traditional financial institutions to experiment with security tokens and DeFi in a secure, regulated manner. The platform will be developed over the next six months and will involve Italian banks, asset managers, and financial institutions, including Intesa Sanpaolo, the country’s largest banking group with more than $1 trillion in total assets under management.

The initiative comes at a time when central banks around the world are exploring the incorporation of blockchain technology into the existing payment system and working on central bank digital currencies (CBDCs). Furthermore, tokenization has become one of the hottest trends in crypto, as TradFi institutions and digital asset firms are placing old-school instruments, including bonds and equities, onto the blockchain.

The project will be led by Cetif Advisory, a consultancy spinoff of the Università Cattolica del Sacro Cuore of Milan’s Cetif Research Centre. They will coordinate the efforts of Polygon Labs, Fireblocks, tech developer Reply, legal and tax consultant Linklaters, and web3 studio DVRS. The initiative will create a safe and open operating environment for supervised entities, which will lead to faster transactions, lower costs, and a more efficient financial infrastructure. According to a Bank of America report, tokenization may reshape how value is transferred, settled, and stored across every industry, creating a more efficient financial infrastructure.

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