Key takeaways
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The Bank of Italy will use the Polygon blockchain to help institutions experiment with DeFi and asset tokenization.
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The Bank will also use crypto custodian Fireblocks.
The Bank of Italy to support institutional DeFi experimentation
The Bank of Italy’s innovation hub has formed a partnership with Polygon Labs and crypto custodian Fireblocks to enable financial institutions to experiment with decentralized finance (DeFi) and asset tokenization. The initiative is designed to create a controlled environment where traditional banks and supervised entities can explore new blockchain-based financial services while remaining compliant with regulation.
The Bank’s Milano Hub will back the development of an experiment focused on security token ecosystems over the next six months. This platform aims to simplify how traditional financial firms test asset tokenization and execute DeFi transactions in a secure, regulated framework.
This development comes as the Italian central bank joins other global monetary authorities researching central bank digital currencies (CBDCs) and practical blockchain applications within the existing financial architecture. The Bank of Italy is pursuing multiple avenues to integrate distributed ledger technology into current market infrastructures and operational processes.
According to the Bank of Italy, Cetif Advisory — a consultancy spin-off of the Università Cattolica del Sacro Cuore’s Cetif Research Centre in Milan — will lead the platform’s development. Cetif Advisory will receive technical and operational support from Polygon Labs, Fireblocks, technology integrator Reply, legal and tax adviser Linklaters, and web3 studio DVRS.
Imanuel Baharier, general manager of Cetif Advisory, commented on the initiative:
“We believe it is vitally important to create the conditions for DeFi to become a safe and open operating environment for supervised entities as well.”
Asset tokenization gaining momentum
Asset tokenization is emerging as a significant application of blockchain technology, enabling both traditional financial institutions and digital asset firms to represent real-world assets — such as equities, bonds, and other securities — as digital tokens on a blockchain. Market participants view tokenization as a potential catalyst for transforming how value is transferred, recorded, and stored across industries.
By converting assets into tokenized form, transactions can become faster and more efficient, and settlement processes may incur lower costs. Tokenization can also increase liquidity for traditionally illiquid assets by enabling fractional ownership and broader investor access. Together, these benefits could help create a more efficient, transparent, and accessible global financial ecosystem.
The Bank of Italy’s initiative represents a practical step toward bridging regulated finance and decentralized technologies, allowing supervised entities to test new models safely while regulators and industry participants observe operational, legal, and compliance implications in real-world scenarios.