According to Algorand, this is the first time an EU member state would employ blockchain technology for bank and insurance assurances.
Layer-1 blockchain infrastructure Algorand has been selected as the public blockchain to enable an “innovative digital assurances platform” for the banking and insurance industries of Italy.
The anticipated launch date for the Algorand-supported platform is early 2023. According to a statement made by Algorand on December 13, this is the first time a member state of the European Union would deploy blockchain technology for bank and insurance guarantees.
A bank guarantee is a pledge by a lending institution to pay a loss in the event that a borrower fails on a loan. It is an option to give a supplier or vendor a security bond or a deposit. A comparable product, but supplied by an insurance company rather than a bank, is an insurance guarantee.
Algorand said that blockchain technology was best suited for the “digital sureties” platform because of its rapid, efficient, low-cost, scalable, and anti-fraud capabilities.
The blockchain-based digital sureties platform is being created by the Research Center on Technologies, Innovation, and Finance of the Catholic University of Milan (CETIF) as part of Italy’s National Recovery and Resilience Plan, a programme designed to improve Italy’s economic recovery after the COVID-19 crisis.
Federico Rajola, a professor at CETIF, said that they selected Algorand because of its “unparalleled degree of innovation” among permissionless digital ledger systems and its “leadership in sustainability.”
Cointelegraph reported in September that Algorand’s protocol update has boosted its transaction speed, processing capacity, and cross-chain capability. The layer-1 blockchain network included state proofs onto its mainnet, allowing trustless communication across blockchain protocols. The update boosted Algorand’s transaction processing speed from 1,200 per second to 6,000 per second.
Also Read: Binance “Temporarily” Suspends USDC Stablecoin Withdrawals
Wallets