Layer-1 blockchain platform Algorand has been chosen as the public blockchain to support an “innovative digital guarantees platform” to be used in Italy’s banking and insurance markets.

The Algorand-supported platform is expected to launch in early 2023. According to Algorand’s Dec. 13 announcement, this is the first time an European Union member state will use blockchain technology for bank and insurance guarantees.

A bank guarantee is when a lending institution promises to cover a loss if a borrower defaults on a loan. It’s an alternative to providing a security bond or a deposit to a supplier or vendor. An insurance guarantee is similar but is offered by an insurance company rather than a bank. 

Algorand said that blockchain technology was ideally suited for the “digital sureties” platform because of its fast, efficient, low-cost and scalable data transactions, as well as its ability to provide protection against fraud.

Just in: Algorand has been selected to be the public blockchain that will support an innovative digital guarantees platform in Italy.

This new Digital Sureties platform is being developed by @Cetif1 and endorsed by @bancaditalia and @ivassocial: https://t.co/EBsOkBEwcb pic.twitter.com/dCFatoYILk

— Algorand (@Algorand) December 13, 2022

The blockchain-backed digital sureties platform is being developed by the Research Center on Technologies, Innovation and Finance of the Catholic University of Milan (CETIF) and is a part of Italy’s National Recovery and Resilience Plan, an initiative set to boost Italy’s economic recovery following the COVID-19…