The Bank of Italy has collaborated with Polygon, a team specializing in scaling solutions for Ethereum, to initiate a pilot program establishing a regulated platform for “institutional DeFi”.

Through this collaboration, Milano Hub, the central bank’s innovation hub, and Polygon Labs will work together to launch the “Institutional DeFi for Security Token” ecosystem. 

According to Milano Hub, DeFi is a cutting-edge financial system based on decentralized protocols that aim to transparently and fairly reproduce traditional financial services.

The project intends to improve knowledge about security tokens in secondary markets, despite not being motivated by economic interests.

Milano Hub Being A Sponsor For Cetif Advisory Initiative

Milano Hub innovation center decided to sponsor the Cetif Advisory initiative as part of its second request for applications. Seven advertisements were chosen for further development in the fintech area. For six months, Milano Hub has committed to supporting the Cetif Advisory effort by providing in-depth regulatory analysis and professional advice.

Cetif Advisory is set to join forces with prominent collaborators, including Polygon Labs, Fireblocks, tech developer Reply, legal and tax advisor Linklaters, and Web3 studio DVRS. The project is poised to engage Italian banks, asset managers, and financial institutions, including Intesa Sanpaolo which is Italy’s largest banking group, overseeing assets exceeding $1 trillion (975 million EUR).

Security token is a unique token made and stored on a blockchain with either permissions or no permissions. Its symbolism is intended to convey ownership of a business or external asset. Security tokens, which work like bonds, stocks, and other forms of equity, can be issued by enterprises and governments. Equities, debt, and asset-backed securities are the three main types of security tokens available on the market.