Algorand, a layer-1 blockchain platform, will support an “innovative digital guarantees platform” to be used in Italy’s banking and insurance markets.

This marks the first time an EU member state will use blockchain technology for bank and insurance guarantees. The platform is expected to launch in early 2023.

A bank guarantee is when a lending institution promises to cover a loss if a borrower defaults on a loan, and an insurance guarantee is similar but is offered by an insurance company.

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.

The platform is being developed by the Research Center on Technologies, Innovation and Finance of the Catholic University of Milan.