Bank of Italy hub supports security token research on secondary markets.

Bank of Italy hub supports security token research on secondary markets.

The Growing Importance of Security Tokens in the Blockchain Industry

The Bank of Italy’s Milano Hub innovation center has recently announced its support for a project developed by Cetif Advisory. The project aims to research a security token ecosystem for institutional decentralized finance (DeFi). Security tokens are digitized representations of real-world assets and have gained significant importance in the blockchain industry. This project, although not intended for commercialization, aims to broaden the scope of analysis of security tokens on secondary markets.

Creating a Safe and Open Operating Environment for Supervised Entities

Imanuel Baharier, the general manager of Cetif Advisory, emphasizes the importance of establishing the conditions for DeFi to become a safe and open operating environment for supervised entities. This aligns with the industry’s goal of developing regulatory frameworks that enable traditional institutions to participate in decentralized finance. The project will focus on allowing institutional market participants to operate in a DeFi environment while adhering to regulatory guidelines.

To achieve this, the project will further develop Cetif Advisory’s Lionity platform, which is described as an “institutional-grade automated market maker.” An automated market maker is a software protocol that enables the algorithmic buying and selling of assets. By improving this platform, they aim to enhance the efficiency and security of DeFi transactions for institutional players.

Collaborative Efforts and Partnerships

Cetif Advisory is a spinoff of the Cetif Research Centre at the Università Cattolica del Sacro Cuore in Milan. The project is a collaborative effort involving several organizations, including Polygon Labs and Fireblocks. Additionally, Italian banks, asset management companies, and ten other financial institutions are set to participate in this initiative.

The selection of the Cetif Advisory project by the Milano Hub indicates the growing recognition of security tokenization in the blockchain industry. The project was chosen during the hub’s second call for proposals, specifically in the fintech category. As a result, the project will receive support from the Milano Hub for a duration of six months, starting this month. This support will include expert advice and in-depth regulatory research, further enhancing the project’s potential impact.

The Emerging Field of Securities Tokenization

Securities tokenization is an emerging field within blockchain technology that has the potential for immense growth. According to a report from Citi GPS, the tokenized securities market may reach a valuation of $4 trillion to $5 trillion by the year 2030. It is predicted that private equity and venture capital will be the most tokenized sectors, followed by real estate.

Tokenizing securities brings several advantages to traditional financial processes. It enables fractional ownership, liquidity, and increased accessibility. By digitizing assets through security tokens, investors can more easily trade and transfer ownership while benefiting from the transparency and security provided by blockchain technology.

Conclusion

The support provided by the Bank of Italy’s Milano Hub to the Cetif Advisory project highlights the growing importance of security tokens in the blockchain industry. By researchi

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