The Italian Banking Association, Associazione Bancaria Italiana (ABI), chose to leverage the blockchain-based system Spunta, as they could not identify an appropriate single actor to run a centralized system.
The Italian Banking Association’s Chief Innovation Officer Silvia Attanasio revealed why the ABI has chosen to use a decentralized blockchain system, Spunta DLT, as opposed to a centralized system.
Spunta Banca DLT is a project headed by the ABI and is operational for the interbank reconciliation process and 55 banks have been operating on the blockchain as of May 2020. Spunta uses R3’s Corda Enterprise to automate the reconciliation of transactions, moving to real-time management for the reconciliation process.
Due to the scale of the ABI’s decentralized project, the Italian banking entity would have needed to find a centralized party to gather and manage and reconcile an incredibly large amount of data coming from various banks across the nation. Speaking at the Unitize virtual blockchain conference, Attanasio explained that, “It wasn’t so easy to identify a single actor that could have run the centralized solution.”
The ABI serves as the central hub for Italy’s banking institutions and transitioned into a blockchain-based format called Spunta—deciding it was a more efficient method of operation for the mass exchange of information.
Attanasio said, “Spunta is a reconciliation process based on bilateral account, it is about an exchange of information rather than an exchange of value.”
Out with the Old
Traditionally, central bank authorities will adopt a centralized format that requires each of the underlying national banks to transfer their data independently to a centralized database. Attanasio said: “We wanted to transform the process, to reshape the process, in order to include some key component of the distributed paradigm, and this was made possible with the distributed solution.”
The ABI chose to leverage a permissioned blockhain platform which does not allow public participation—keeping with the bank’s traditional position of only placing trust in parties deemed suitable by industry standards. (source: blockchain.news)