The Italian Banking Association (ABI) announced on Tuesday that nearly 100 Italian banks have officially started operating on the country’s banking blockchain network, Spunta, with the addition of 42 banks later.
Banks first participated in the blockchain project designed to improve interbank data transfer and mediation speeds in March 2020, and by May, 55 banks were officially on the network.
According to ABI’s announcement, on the Spunta network, where 204 million transactions have been processed since March, 350 million transactions are expected by the end of this year.
Blockchain speeds up the complex interbank process, from how much banks owe another bank to another. Earlier this year, an ABI official reported that traditionally the reconciliation took weeks to complete, but thanks to the blockchain network, similar transactions were terminated within a day.
Spunta is a project created by ABI Labs, which started to experiment with Interbank transfers in Corda in early 2018.
ABI consists of more than 700 banking institutions and more banks will join the blockchain network in the coming days. In addition, ABI announced earlier this year that Italian banks are ready to pilot the digital euro.
How Does Blockchain Work?
To begin with, let’s underline that we will continue with the simplest explanation that does not contain any metaphors or exaggerations. A block in the cryptocurrency language is a record of new transactions. After each block is completed, it is added to the chain, forming a chain of chains. This is Blockchain, which means block chain.
Since cryptocurrencies are encrypted, processing any transaction means solving complex mathematical operations (and as the blockchain grows, those transactions become more difficult to resolve over time). People who solve these mathematical operations can be rewarded with cryptocurrency in a process called “mining”.