Italian Central Bank Supports a DeFi Tokenization Project

Italian Central Bank Supports a DeFi Tokenization Project

The Milano Hub innovation centre created by the Bank of Italy has announced its support for a DeFi tokenization project developed by Cetif Advisory.

The main goal of the project is to research a security token ecosystem for institutional decentralized finance (DeFi), and while the project has no commercialisation purpose, it can support the scope of analysis of security tokens on secondary markets.

Institutional market participants who wish to operate in a DeFi environment while remaining compliant stand to benefit the most from this research project. Furthermore, the endeavour will further develop Cetif Advisory’s Lionity platform, which was described as an institutional-grade automated market maker.

The Milano Hub innovation centre chose to back the Cetif Advisory project as part of the hub’s second call for proposals. In the fintech category, there were 7 campaigns that received the green light. Milano Hub will support the Cetif Advisory campaign for six months and will provide in-depth regulatory research as well as expert advice.

Representatives from Cetif Advisory cited by emphasised the importance of supporting DeFi to allow it to become a safe and open operating environment for supervised entities.

More information about security tokenization

According to, a security token is a unique token issued on a permissioned or permissionless blockchain, representing a stake in an external asset or enterprise. Entities such as governments and businesses can issue security tokens that serve the same purpose as bonds, stocks, and other equities. There are 3 different categories of security tokens available in the market, namely equity tokens, debt tokens, and asset-backed tokens.

The Money, Tokens and Games report by Citi reveals that the world is e approaching a turning point, with blockchain taking centre stage. The report outlines that successful adoption will be reached when blockchain has more than a billion users who do not even realise they are using the technology.

This surge in adoption could be influenced by the launch of central bank digital currencies (CBDCs) by large central banks as well as tokenized assets in gaming and blockchain-based payments on social media.

City believes that by 2030, up to USD 5 trillion of CBDCs could be circulating in major economies in the world, half of which could be linked to distributed ledger technology. As for the tokenization of financial and real-world assets, they could represent a catalyst for blockchain’s breakthrough, with tokenization expected to grow by a factor of 80 in private markets and reach up to almost USD 4 trillion in value by 2030.

Learn more: The Paypers

    Newsletter | Every weekday

    Smart Central News Weekly Briefing

    Only top industry news of the week in your inbox