The second largest bank in Italy, Intesa Sanpaolo, and 13 other banks have successfully completed the first phase of an interbank reconciliation blockchain trial.
The tests, which started on June 4, were held in conjunction with ABI Lab – a research lab supported by the Italian Banking Association (ABI) – and finished last week.
The project is aimed to improve certain aspects of "spunta," or inter-bank transactions, such as the time needed to identify mismatched transactions between two banks, and the lack of a standardized process and a single communication protocol.
In the 10-month proof-of-concept and testing phase, each bank was assigned a node and the banks uploaded actual data bank data, processing 1,200,000 transactions through the course of the trial.
The interbank system is built on Corda Enterprise, the platform developed by blockchain consortium startup R3 that offers what's called a Blockchain Application Firewall. This enables the platform to be "deployed inside corporate data centres, while retaining the ability to communicate securely with other nodes anywhere else in the world," according to a press release.
Katerina Koutoulaki, associate director at R3, told CoinDesk by email:
The project also utilizes the Sia blockchain node infrastructure. The hope is to "create bilateral channels through which each counterparty can exchange information whilst maintaining confidentiality and privacy so that only those with a need to see the data can access it," according to the release.
ABI Lab was set up to investigate whether blockchain can provide data transparency and visibility, faster transactions and the "ability to perform checks and exchanges directly within the application."
The group is now preparing for the next phase of the project in which the banks will utilize the blockchain application for everyday transactions.
Intesa Sanpaolo bank pavilion image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.