The Bank of Italy’s Milano Hub innovation center will provide support for a project developed by Cetif Advisory to research a security token ecosystem for institutional decentralized finance (DeFi).
The project has no “commercialisation purpose,” but will extend “the scope of analysis” of security tokens on secondary markets. Security tokens are digitized representations of the ownership of real-world assets. Cetif Advisory general manager Imanuel Baharier said in a statement:
“We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities.”
The project will strive to allow institutional market participants to operate in a DeFi environment while complying with regulatory guidelines. It will further develop Cetif Advisory’s Lionity platform, which it describes as an “institutional grade automated market maker.”
Cetif Advisory is a spinoff of the Cetif Research Centre at the Università Cattolica del Sacro Cuore in Milan. The project is a collaboration with Polygon Labs, Fireblocks and other organizations. Italian banks, asset management companies and ten other financial institutions will take part in it.
— MilanoFinanza (@MilanoFinanza) June 16, 2023
The Cetif Advisory project was chosen during the hub’s second call for proposals. The project was one of seven projects given the green light in the fintech category. It will receive support from the Milano Hub for six months, beginning this month, in the form of expert advice and in-depth regulatory research.
Securities tokenization is an emerging field in blockchain technology. Citi GPS recently predicted that the tokenized securities market may be worth $4 trillion to $5 trillion by 2030, with private equity and venture capital becoming the most tokenized, followed by real estate.