- The banks in Italy will be making a transition to blockchain in an effort to verify the transaction logs.
- The use of blockchain technology trial has successfully made it to the second stage.
- Approximately 85% of the banks in Italy have made this transition as per the reports.
The banks in Italy will now be utilizing the Corda blockchain in order to bolster the double-verification transaction logs. This approach by the financial institutions of Italy is an inclination of mass blockchain adoption.
The head of the Italian Banking Association (Associazione Bancaria Italiana or ABI), Silvia Attanasio said, the fundamental technology of data exchange and the method of interbank reconciliation had to change.
Folks who do not know what interbank reconciliation is:
“A bank reconciliation is the process by which the bank account balance in an entity’s books of account is reconciled to the balance reported by the financial institution. Any difference between the two figures needs to be examined and, if appropriate, rectified.
The first blockchain trial of interbank reconciliation was concluded back in 2018. The second major bank of Italy went ahead with this initiative and after a while 13 other banks joined the race.
As of now, 85% of Italian banks, 55 in total are implementing Corda blockchain for sharing interbank data transfer. The third phase of the trial will begin in October and the board aims 80 to 100 banks to register on the platform.
As per Attanasio, the previous reconciliation framework was hectic and very unpredictable. Ever since the system is running on Corda, the reconciliation only takes a day as compared to what it took before switching to Corda.
The Italian financial system operates under the Interbank Agreement passed in 1978, it was updated last year. The agreement includes executing data standardization, Italy set a data within which they were about to integrate to the standard.
NTT Data, an Information Technology Company is the developer of the network and SIA, a bank technology company oversees it.
Use of blockchain
The use of blockchain technology has been increasing over the last few decades and it is providing real-time solutions to countless financial issues.
The global financial entity, Visa recently announced the support for blockchain and other digital assets for the ease of customers.
“If we failed in this process, the worst thing that could happen was to have a problem in the information exchange between banks. Clients are not affected, the companies are not affected. It was a natural sandbox.”
However, the board was ready to consider the database while opposing Corda but it was not open to the idea of banks maintaining certain data on separate ledgers.