Bank of Italy Joins Forces With Polygon and Fireblocks to Launch Institutional DeFi Platform

• The Bank of Italy recently announced a partnership with Polygon and Fireblocks to pilot a regulated platform for “institutional DeFi”.
• This collaboration involves a G7 Central Bank, financial regulators, and banks working together on tokenized asset initiatives.
• The project aims to create a regulated environment for security token trading while exploring different designs.

Bank of Italy’s Innovation Hub Partners with Polygon and Fireblocks

The Bank of Italy recently announced a partnership with the Ethereum scaling team Polygon and crypto infrastructure provider Fireblocks to initiate a pilot program aimed at establishing a regulated platform for “institutional DeFi”. This collaboraton sets an important landmark as it involves a G7 Central Bank, financial regulators, and associations of banks working together on tokenized asset initiatives. The project will be developed in conjunction with Milano Hub, the innovation center of Italy’s central bank.

What is DeFi?

The concept of DeFi, or decentralized finance, revolves around innovative financial technology that operates on decentralized protocols aiming to provide inclusive and transparent financial services. Milano Hub expressed its excitement about exploring the potential of blockchain technology and the DeFi sector despite recent negative sentiments affecting the industry.

Creating A Regulated Environment For Security Token

The DeFi pilot program aims to create a regulated environment for security token trading while exploring various designs for the same. This partnership also highlights how major financial institutions remain interested in blockchain technology despite global crackdowns in recent times. Italy’s approach to regulating crypto has been evolving, with its 2023 budget passing introducing capital gains tax on crypto profits as well as calling for tighter regulations against risks associated with the sector while still expressing support for compliant crypto activities such as DeFi projects.

Development Support For Selected Projects To Begin Later This Month

The development support for selected projects under this partnership are set to begin later this month. Participants will receive six weeks of mentorship and guidance from Milano Hub, featuring seminars, events, and conferences with experts in banking, finance, and regulatory matters. Apart from Polygon Labs and Milano Hub, other participants in the project include Fireblocks—an institutional digital asset custodian—and DVRS—a development team focused on automated market maker exchanges—as well as several Italian banks, asset management companies, and financial institutions.

Conclusion

This groundbreaking collaboration between major players marks an exciting step towards creating more transparent environments for security token trading by leveraging blockchain technology within institutional standards set by regulatory authorities worldwide. As Milan Hub states: “It is only through collaborations like these that we can unlock all possibilities that lie ahead”