The Italian banking system at the end of last month went into full production with one of the first deployment of the blockchain network in the interbank market in the country. JP Morgan had already launched the interbank information network that allows its correspondent banks to chase down details of cross border payments and rectify them on the blockchain network. The new Spunta Banca application is set to connect up an entire domestic banking system on the blockchain network.
Mismatches can now be recognized and reconciled immediately.
The Italian Banking Association (1) has built the application to swiftly and efficiently correct any discrepancies in the separate ledgers for the so-called Nostro and Vostro accounts that Italian banks hold for each other. It operates as an authorized network on R3’s Corda enterprise platform. Charley Cooper of R3 said that the blockchain network removes the trouble of correcting mistakes that used to take days and weeks to resolve. Mismatches can now be spotted and reconciled immediately, he added. Banca Mediolanum, Banca Monte Dei Paschi di Siena, Intesa Sanpaolo, UBI, and UniCredit are among the leading institutions that are using the blockchain network.
“It is the most significant real-world digital transformations in the interbank financial services.”
David Rutter, chief executive of R3, said that this heralds one of the most significant real-world digital transformations in the interbank financial services sector till now. The technology that is used to underpin cryptocurrencies is being widely used in different areas all over the world. The blockchain technology is now set to digitalize the process of settling transaction flows that generate accounting entries in the reciprocal accounts of Italian banks, as well as the management of pending transactions, which would help reduce the operational risk across the system.
The head of the innovation at the ABI, Silvia Attanasio, said that the first benefit of deploying this technology was that the banks gained full visibility of all the information about the accounts, both Nostro and Vostro, via a dashboard.