Layer-1 distributed ledger Algorand was chosen as the public blockchain to underpin an innovative digital assurance platform launched in Italy’s banking and insurance industries.
The scheduled launch for the Algorand-supported platform is in early 2023. According to Algorand, it’s the first time a European Union member state would deploy blockchain technology for bank and insurance guarantees.
A bank guarantee occurs when a lending institution pledges to pay a loss in the event of a borrower’s loan failure. It is an alternative to delivering a security bond or a deposit to a vendor or provider. A similar product, but supplied by an insurance company rather than a bank, is an insurance guarantee.
Algorand stated that blockchain technology was particularly suited for the digital sureties platform due to the speed, efficiency, low cost, scalability of its data exchanges, and capacity to prevent fraud.
Just in: Algorand has been selected to be the public blockchain that will support an innovative digital guarantees platform in Italy.
This new Digital Sureties platform is being developed by @Cetif1 and endorsed by @bancaditalia and @ivassocial: https://t.co/EBsOkBEwcb pic.twitter.com/dCFatoYILk
— Algorand (@Algorand) December 13, 2022
The Research Center on Technologies is developing the blockchain-backed digital sureties platform, Innovation, and Finance of the Catholic University of Milan as part of Italy’s National Recovery and Resilience Plan, a project designed to boost Italy’s economic recovery after the COVID-19 pandemic.
Professor Federico Rajola of CETIF stated that they picked Algorand due to its innovation among permissionless digital ledger technologies and sustainability.
He said that their goal is to help Italy recover from the economic impact of Covid-19 and excel through innovation and leadership. These platforms can and will significantly contribute to the competitive sustainability of the nation to everyone’s advantage.
Algorand’s protocol update has boosted its transaction speed, processing capacity, and cross-chain capability. The layer-1 blockchain network incorporated state proofs on its mainnet, enabling trustless communication across blockchain protocols. The update boosted Algorand’s transaction processing speed from 1,200 per second to 6,000 per second.