Victor Ugochukwu · Dec 14, 2020 . 5min read
Major Italian insurer launches Blockchain surety bonds
One of Italy's oldest banks is now offering blockchain surety bonds as a part of the country's Fideiussioni Digitali project.
By Shilika · Aug 8, 2020 . 4min read
One of the biggest insurers in Italy is now offering a blockchain surety bond. The offer comes as a part of the Central Banks “Fideiussioni Digitali” programme. Major financial institutions and researchers are backing the project in an effort to digitize Italy’s financial system.
More than 30 banks are working with CeTif (Research Center on Technology), payments network SIA, tech company Reply, and regulator IVASS on the project.
Authorities issue surety bonds for construction contracts, to protect against the possibility of the supplier failing to deliver. However, off late, there has been an increase in fraudulent activities in the surety space. Moreover, blockchain’s role here would be to ensure that banks payout on the surety claims.
Reale Mutua will be the first bank to issue such bonds. One of Italy’s oldest insurers, the bank has been around since 1828. The firm has stated that as a part of its objective to embrace modern technology. Thus, it will begin issuing the blockchain surety bonds. The first bond issued will be in relation to the Municipality of Milan for the completion of certain reclamation works. Therefore, Milano Progetti is responsible for carrying out the work.
“Reale Group keeps on investing in innovation, with the firm belief that understanding and monitoring the main trends in the evolution of the company, of the market and of the insurance sector is one of the key success factors for the future. Blockchain technology will bring important advantages along the whole value chain.”– Gianluca Lorenzi, Head of Reale Lab 1828.
Blockchain surety bonds are not new. In Switzerland, Accenture and Insurer Zurich have already engaged in such an agreement. Elsewhere, in Australia, Scentre Group, IBM, ANZ, and Commonwealth Bank and Westpac are involved in a similar deal.
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