SIA, CeTIF and Reply to launch digital sureties using blockchain technology
The pilot phase of "Fideiussioni digitali" (digital sureties), the project promoted by CeTIF, SIA and Reply – which also saw the involvement of the Bank of Italy, the Institute for the Supervision of Insurance (IVASS) and the Italian Finance Police – to digitalise the surety management process on blockchain, has been successfully concluded.
Over 50 players – including guarantors, guaranteed parties and contractors – from the banking, insurance, financial, public administration and corporate sectors participated in the trial carried out within a "Sandbox" under the supervision of a Scientific Committee made up of representatives from the relevant Authorities and public and private bodies.
During the pilot phase, which lasted about four months, more than 350 sureties were digitally managed with guaranteed sums ranging from EUR10,000 to EUR1.4 million, and an average amount of EUR275,000. According to data provided by participants, use of blockchain and DLT technology can lead to a reduction in fraud of around 30 per cent and in operating costs from 10 per cent to over 50 per cent, depending on the number of transactions processed.
Additional benefits that emerged from the trial include: cost reduction resulting from the dematerialisation of documents; increased transparency and certainty of information throughout the entire surety management process, linked to greater information sharing; greater efficiency in management of the release of the surety with consequent availability in a shorter timeframe of lines of credit to be allocated to new calls for tenders.
Based on the effectiveness of the trial and the positive feedback of participants – who represent the main players in the management of sureties in Italy – further technological, functional and regulatory improvement activities have been started up with the aim of making the platform fully operational and available on the market in the second half of 2021.
Did you like this article? We’re holding an online digital assets summit on 10 June. Click here to claim your place…