The Italian Banking Association (ABI) will deploy blockchain technology to run reconciliations beginning March 2020, Finextra reported.
The first use of the blockchain among Italy’s banks will integrate distributed ledger technology in interbank processes to accelerate settlements.
The move is part of the Spunta Project, a program managed by ABI Lab, the association’s research and innovation arm, to improve transparency and efficiency of communication between banking counterparts.
The banking consortium also aims to enact daily rather than monthly reconciliations. The Italian word “spunta” translates to check.
The latest round of tests reportedly began in February with participation from 18 banks, which together represent 78% of the Italian banking sector by number of employees.
Last October marked the successful completion of the first trial round, lead by Intesa Sanpaolo, Italy’s second largest bank, and 13 others. In the 10-month proof-of-concept and testing phase each bank was assigned a node and the banks uploaded actual data bank data, processing 1,200,000 transactions through the course of the trial.
The trial validated the use of blockchain and smart contracts to assist in knotty banking operations to reduce discrepancies between banking ledgers.
In February of this year, the Italian House of Representatives approved a bill defining DLT and blockchain, as well as the technical criteria that smart contracts will have to comply with in order to have legal validity.