- Polygon is emerging as the go-to for tokenization.
- The Bank of Italy has tipped the network for a landmark DeFi tokenization project.
- Polygon continues to be a leading choice for real-world blockchain applications.
Tokenization is fast emerging as a leading narrative for blockchain technology adoption, with government agencies and TradFi jumping on the bandwagon.
As the trend continues, Polygon has emerged as a favorite for institutions and governments looking to explore the potential of DeFi. In one of the most notable instances, the popular Ethereum Layer-2 protocol served as the settlement layer for JP Morgan’s first DeFi transaction involving real-world assets as part of Singapore’s Project Guardian in November 2022.
Building on these achievements, the Bank of Italy has turned to Polygon for what promises to be a landmark institutional DeFi pilot.
Italian Opportunities for Polygon
In a tweet on Wednesday, July 26, Polygon Labs revealed that it had been selected by Milano Hub, Bank of Italy’s innovation arm, to participate in a planned DeFi pilot dubbed “Institutional DeFi for Security Token Ecosystem Project.
As explained in a blog post, the project would offer leading Italian banks, asset management companies, and financial institutions the opportunity to experiment with tokenized securities and other opportunities offered by DeFi in a regulated environment.
The Bank of Italy has tipped Certify Advisory, the consultancy arm of the Università Cattolica del Sacro Cuore of Milan’s Cetif Research Centre, to guide the research effort. Aside from Polygon Labs, other participants include Fireblocks, an institutional-facing digital asset custody firm, and DVRS, a development team known for building automated market maker (AMM) exchanges.
Speaking on the development, Certif Advisory General Manager Imanuel Baharier highlighted the importance of creating a regulated and secure environment for institutions within DeFi.
"We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities as well. We are confident that enormous benefits for the entire financial system could result from such accessibility in terms of security for institutional and professional operators, and in terms of opportunities, stability, and resilience for the whole system," he stated.
According to the published statement, emerging projects from the research effort will receive six months of support from the Milano hub.
Polygon Lab’s recent partnership with the Italian central bank builds on its growing appeal among institutions and governments exploring real-world blockchain applications.
Polygon: A Favorite for Real-World Blockchain Applications
Polygon Labs recently highlighted the growing adoption of the Polygon network in real-world applications, outlining ten instances where the network had been chosen over the competition. The applications have included tokenization, supply chain optimization, and even education.
In a more recent instance, West Bengal’s New Town Kolkata Development Authority partnered with Airchains, a Web3 middleware SaaS platform, to record and track land ownership and mutation with NFTs deployed on Polygon Supernets.
Polygon Labs Executive Chairman Sandeep Nailwal commenting on recent developments, suggested that Polygon was driving mainstream Web3 adoption.
“Seems like the whole world is building on Polygon. Mainstream Web3 = Polygon,” Nailwal tweeted.
On the Flipside
- The Bank of America has tipped the Avalanche network as the future of tokenization.
- In June, the Bank of Italy argued that crypto had failed to deliver on promises like efficiency, resilience, and transparency.
Why This Matters
With the growing interest in tokenization, nods from a G7 central bank like the Bank of Italy will likely boost confidence and interest in the Polygon network, attracting greater interest and adoption.
Read this to learn more about Hamilton Lane’s utilization of the Polygon network for tokenization:
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