Banca IMI released a Whitepaper today going over a smart contract in the works by Intesa Innovation, Oraclize, and Banca IMI. The Whitepaper provides insight into Blockchain related work that is currently being done at the bank. Apparently, they have been exploring the tech for over 2 years now.
The primary focus of Banca is in the business derivatives market. One of the bank’s heads, Massimo Morini, highlights that an attempt to exploit Blockchain technology from a financial perspective is underway. And that public Blockchains can offer much more than regular technological tools.
The Banca IMI and Blockchain derivatives exploration.
The Whitepaper released today expresses that generic assets like gold, fiats, and bonds are utilized in order to lower losses in high-risk endeavors. Additionally, the report notes that generic paper contracts are horrendous at specifying exact data sources for counterparties. Thus, there can be some uncertainties.
Uncertainties between different parties can obviously result in legal issues, delays, and defaults. However, with smart contracts, this wouldn’t really be an issue.
The business plan disclosed that a smart contract utilizing the proof of concept philosophy was utilized to relay contract information to external devices set up in a cloud.
Morini then went on to state that his team is building a smart contract that’s integrated with dispute resolution parameters.
The smart contract can anticipate possible issues and encode common solutions, cutting down resolution expenses by an extreme amount.
Financial institution support needed for Blockchain ecosystem.
Morini did state that his team desperately needs the support of other financial institutions. He believes that the benefits that could be drawn from Blockchain technology will be unused if major financial players don’t jump aboard.
Banca is also working on two other projects at the same time. One aims to allow counterparties to relay messages concerning derivates to one another off of the Blockchain. The other project is attempting to provide users with access to private a Blockchain. Which is implemented in a counterparty clearinghouse for derivatives trading.
It’s great to see that the Italian bank understands the positives of utilizing Blockchain technology in the financial sector. Yet, privacy is still a big issue for many in the derivatives market.