Investments in blockchain technology are gaining increasing popularity in the banking and financial services market, even faster than initially anticipated.
This year, investments in blockchain technology will reach $11.7 billion. The Italian banking system is a pioneer in Europe, with approximately 100 banks utilizing this technology, including BNL BNP Paribas, Intesa Sanpaolo, Unicredit, and UBI Banca, according to a study conducted by the Rome Business School titled “The Italian Banking System and the New Challenges of Blockchain and Cryptocurrencies: Risks and Opportunities.”
The study analyzes the role of blockchain technology and cryptocurrencies in transforming global business models, with a particular focus on the case of Italy and their use in the banking systems.
What is Blockchain?
Blockchain allows for increased transparency, speed, and reliability in processes. It is based on a series of distributed “nodes” where information and data from a procedure are recorded and stored. Furthermore, each piece of information on this “distributed ledger” is fully traceable, and its exact origin can be reconstructed.
Banks and Blockchain: The Benefits
According to data from the Politecnico di Milano Observatory, the most advantageous aspects of this technology, especially in the relationship between banks and blockchain, include:
- Improved information sharing with suppliers and partners.
- Reduced risk of fraud or data compromise.
- Simplification and improvement in reconciling payments and data.
- Increased customer trust in financial institutions.
- Process automation, resulting in time savings.
With blockchain, transparency increases as each phase of the process is tracked and cannot be modified or tampered with afterwards. Another strategic advantage of the combination of banks and blockchain is security. From a data protection perspective, blockchain ensures a higher level of reliability compared to more traditional systems. Although this technology is not entirely immune to cyber attacks, it should be noted that compromising it is extremely difficult, precisely because the information is distributed across multiple validated blocks.
Italy as a Pioneer in Blockchain Technology Adoption
According to the research conducted by the Rome Business School, Italy is the most advanced European country in terms of blockchain utilization, thanks especially to the introduction of the “Spunta” procedure. This network includes approximately 100 Italian banks, enabling smoother and safer reconciliation and allowing Italy to participate in various studies on a potential digital currency.
The study highlights how cryptocurrencies have become a fundamental alternative asset in the global financial landscape. Together with blockchain technology, they could reshape many aspects of daily life and society. While opportunities are numerous, some challenges remain, such as fragmented regulation, difficult communication between systems, and criminal misuse.
The study emphasizes that the use of these new technologies introduces greater transparency and efficiency, reduces costs, and specifically benefits banks by protecting sensitive information, ensuring safer, faster, and more reliable payments, and reducing transaction costs for users and businesses. The research has revealed a possible reduction in operational costs by up to 35-40%, along with enhanced fraud prevention capabilities.
The authors conducted a survey in the Metropolitan City of Rome Capital to assess the level of awareness of cryptocurrencies among citizens. A total of 127 participants took part in the survey.
The results showed that 64% of the participants were familiar with the cryptocurrency Bitcoin, while only 1% knew about Ethereum, and only 2% had basic knowledge of blockchain technology. Among young people aged 18 to 25, 41% were familiar with cryptocurrencies, while the percentage dropped to 35% in the age group of 23 to 35.
This indicates that younger individuals have a greater knowledge of cryptocurrencies and blockchain technology, likely influenced by the rise of financial influencers on social media.
According to Europol, money laundering is the predominant criminal activity related to crypto crimes. Virtual currency transactions are incredibly difficult to trace, and there is a significant ease of exchanging one cryptocurrency for another or converting it into legal tender. Additionally, approximately 1.5 billion euros in cryptocurrency are spent annually on dark web platforms to purchase drugs, engage in prostitution, and other illicit activities.
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