The Bank of Italy's Milano Hub innovation center will provide support to a project spearheaded by Cetif Advisory that aims to develop a security token ecosystem for institutional decentralized finance (DeFi).
The project is a collaboration between Cetif Advisory, Polygon Labs, Fireblocks, and other organizations, with participation from Italian banks and ten other financial institutions.
Building an Institutional DeFi Ecosystem
The endeavor, selected during the Milano Hub’s second call for proposals, will expand the scope of analysis of security tokens on secondaary markets. As explained by Cetif Advisory's general manager, Imanuel Baharier, these security tokens are digitized representations of the ownership of real-world assets. Baharier emphasises the importance of establishing conditions for DeFi to become a safe and open operating environment for supervised entities.
The project doesn't seek commercialisation, rather it aims to allow institutional market participants to operate in a DeFi environment while complying with regulatory guidelines. It will further develop Cetif Advisory’s Lionity platform, touted as an “institutional-grade automated market maker."
Cetif Advisory, a spinoff from the Cetif Research Centre at the Università Cattolica del Sacro Cuore in Milan, will receive six months of support from the Milano Hub. This backing includes expert advice and in-depth regulatory research, and it began earlier this month.
Emergence of Securities Tokenization
Securities tokenization is an emergent field in blockchain technology. According to projections from Citi Global Perspectives & Solutions, tokenized securities market coulld be worth between $4 trillion and $5 trillion by 2030. The report suggests that private equity and venture capital are likely to become the most tokenized sectors, followed closely by real estate.
The project from Cetif Advisory, in collaboration with other industry stakeholders, may play a crucial role in advancing the DeFi ecosystem and furthering the utilization of tokenization. This move signals the Italian Central Bank's keen interest in the innovative potential of blockchain technology and tokenized securities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
