Bank of Italy Ventures into Crypto: Teams Up with Polygon to Unlock Tokenized Assets’ Potential

• Bank of Italy’s Innovation Centre, Milano Hub, collaborates with Cetif Advisory and Polygon Labs to research DeFi and experiment with security tokens.
• The collaboration signifies a significant step towards integrating DeFi within traditional financial institutions, promoting accessibility and compliance for supervised entities.

A historic collaboration has been forged among Milano Hub, the Bank of Italy’s Innovation Centre, Cetif Advisory, and Polygon Labs. They are joining forces on a project, fittingly named “Institutional DeFi for Security Token Ecosystem,” to explore opportunities within the DeFi (Decentralized Finance) realm, primarily concentrating on security tokens.

A Major Leap in Financial Innovation

Milano Hub, an initiative by the Bank of Italy, is a platform for experimentation that attracts contributions from independent Italian and international experts. It cooperates with institutions and universities and encourages dialogue among market operators, all geared towards enhancing Italy’s financial services.

The latest project sees it partnering with leaders in the digital finance domain, including the enterprise digital asset operations platform Fireblocks, technical developer Reply, legal and tax consultant Linklaters, and Web3 studio DVRS. Additionally, a host of Italian banks, asset management firms, and financial institutions are on board to research how traditional finance (tradfi) can leverage DeFi.

Central to this groundbreaking venture is the development of a platform that enables institutional entities to navigate DeFi while adhering to rigorous regulatory measures. Lionity, an automated market maker targeting the secondary market of security tokens, is one such platform currently under development.

The collaborations chosen by Milano Hub will benefit from developmental support spanning six months. This initiative includes sector expertise, regulatory studies, and event organization, inviting participants from the projects, financial institutions, and academic research hubs.

Imanuel Baharier, the General Manager of Cetif Advisory, expressed optimism about the potential of DeFi for supervised entities. He stated,

“We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities as well.”

This collaboration represents a critical step forward in achieving that aim, highlighting the importance of technological innovation in enhancing financial inclusivity.

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