Despite a depressed market that has seen a number of failures and collapses in web3 during 2022, Algorand seems to stand out as one of the few blockchain networks that is unscathed. Their partnership with FIFA and the World Cup helped the network remain stable during a time that saw a majority of networks falter. 

Now, it appears that Algorand is continuing to see massive improvements in the world of crypto as it becomes an official partner with the Bank of Italy and its interest in digital currencies using blockchain. 

Selection by the Bank of Italy

The partnership between Algorand, the Bank of Italy, and IVASS will help to create a new digital platform that will serve “digital sureties” in Italy. This means that banks and insurances in Italy will be able to use the public blockchain to host important information in a network that is immutable, thus creating additional confidence in Italy’s banking network. 

A large reason for this is because Italy wants to use the blockchain as an additional method of building the country’s economy back to pre-pandemic levels in what is known as the National Recovery and Resilience Plan. 

Benefits of choosing Algorand

The Italian government is hoping to leverage the efficiency of the Algorand network to help provide faster and more readily available banking information to customers and employees in an effort that can become more prosperous over time (compared to the current crypto market). 

Another major benefit to the new partnership with Algorand is the added level of transparency that a public ledger brings. This will help reduce the risks of fraud that accompanies centralized businesses. 

As we’ve seen many times in the past two years, transparency on the blockchain has led to the arrest of multiple people who have been accused of insider trading, Ponzi schemes, and other types of malicious activity. While many believe that this proves that blockchain is a tool for scammers, what it really shows is that making every transaction public forces businesses to be completely transparent with their funds and open to scrutiny. 

AVM 8 update

At the same time, Algorand has also improved their Algorand Virtual Machine (AVM), meaning that using the Algorand blockchain will become significantly more efficient just in time for this new partnership with the Bank of Italy. 

With AVM 8, smart contracts will be able to use boxes that are modular components to a smart contract. As the network grows and expands, many smart contracts are often left unable to keep up with the updates due to immutability. 

This will become especially helpful for the Bank of Italy because of the ever-changing environment of national banking and politics. It will be increasingly important that smart contracts are modular so that they can continue to be useful within the Italian economy as new laws surrounding crypto become implemented.

State of Crypto in the EU

It’ll be interesting to see how this partnership plays out because Italy is the first country within the EU to adopt blockchain technology in such a significant way with their central bank. Christine Lagarde, president of the European Central Bank, has already stated her opinions on cryptocurrency, believing that it has no real value. 

Further, Italy has already banned NFT technology from integrating with many of the country’s museums and galleries, claiming that NFT sales of their historical art is destructive to their cultural heritage. 

Although NFTs and cryptocurrencies are wildly different aspects of blockchain technology, it is notable to see that their opinion on NFTs does not extend to the wider world of web3.