Algorand has been selected to support a digital guarantees platform in Italy, and the new platform should become fully operational in 2023. The Bank of Italy worked with the Italian insurance authority IVASS and more than 30 other financial institutions to showcase the usability of distributed ledger technology for guarantees.
The event was hosted by the Research Center for Technologies, Innovations, and Finance of the Catholic University of Milan (CETIF). CETIF representatives cited by crowdfundinsider.com revealed that they selected Algorand due to its innovative features and security characteristics, but also due to its sustainability efforts. They also mentioned the Digital Sureties platform supported by Algorand, which will serve the needs of Italy’s banking and insurance markets.
Algorand is a proof-of-stake blockchain with a focus on sustainability. According to investopedia.com, the Algorand platform is designed to process multiple transactions quickly, and it can also host other cryptocurrencies and blockchain-based projects, which makes it a direct competitor to Ethereum. Algorand is an open-source blockchain, which means that anyone can view and contribute to the platform's code.
When compared to Ethereum, both platforms provide infrastructure to support the development of other blockchain-based projects, use smart contracts, and use proof-of-stake. However, the two have different staking and rewarding methods. The Algorand blockchain supports various projects, many of which focus on decentralized finance such as decentralized lending and trading. In addition, the Algorand blockchain supports other cryptocurrencies such as stablecoins.
According to crowdfundinsider.com, the use of DLT in financial transactions is on a growing trend. The news comes in the context of Italy’s National Recovery and Resilience Plan (NRRP), which was designed to tackle the crisis triggered by the COVID-19 pandemic. Moreover, the plan involved a USD 200 billion fund allocation to Italy from the EU in order to support co-grants and co-loans.
According to europarl.europa.eu, measures under the plan are to be completed by 2026, and Italy has so far received 34.9 % of the resources (in the form of pre-financing and two payments for both grants and loans), which is above the EU average. A further eight payments each for grants and loans will depend on progress made in implementing the plan.
The European Parliament, which was an advocate for the creation of a common EU recovery instrument, participates in interinstitutional forums for cooperation and discussion on its implementation and scrutinises the work of the European Commission.
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