Investments in blockchain technology will reach $ 11.7 billion this year.

  • The Italian banking system has been using blockchain technology since 2020, currently around 100 banking institutions use it, including BNL BNP Paribas, Intesa Sanpaolo, Unicredit, UBI Banca;
  • Italy is a pioneer in the use of blockchain technology thanks to the introduction of the “Check” procedure, which allows for a more fluid and secure reciprocal reporting as well as allowing Italy to participate in studies on a possible digital currency;
  • World banks spend about 2 billion euros each year on KYC costs alone, the use of DLT technology could lead to cumulative savings of 200 million euros;
  • According to a survey carried out in the Metropolitan City of Rome, 67% of the participants said they had heard of crypto currencies; only 2% say they know how the blockchain works; 41% of young people between 18-25 years old know what “crypto coins” are;
  • Half of the millionaires of the millennial generation have at least 25% of their assets invested in crypto currencies and NFTs, while the millionaire baby boomers hold less than 10% in these assets;
  • The amount of crypto and blockchain companies willing to invest in sports sponsorships is set to grow: worldwide the investment has increased from 17 million in 2020 to 605 million in 2021, a + 3,488%, while the phenomenon is increasingly widespread fan token clubs (FTC);
  • Crime-related risks are still high: 23% of crypto currency transactions worldwide have a criminal purpose; approximately 1.5 billion euros in crypto coins are spent every year on dark web platforms to buy drugs, prostitution and illegal activities.

Rome, April 5, 2022. Rome Business School, a post-graduate training institute part of the Formación y Universidades network of De Agostini and Grupo Planeta, has published the research “The Italian banking system and the new challenges of Blockchain and Crypto currencies: risks and opportunities ”by Dr. Marshall Langer, Program Director of the Master in Finance of the Rome Business School, by Dr. Alessandro Villadei, Professor of the Master in Finance and Independent Financial Analyst and Valerio Mancini, Director of the Research Center of RBS. The research analyzes the role of blockchain technology and crypto currencies in the transformation of business models worldwide, examining in particular the case of Italy, their use in banking systems, the steps taken so far and the risks to date.

Crypto currencies have now become a fundamental alternative asset in the global financial chessboard, and together with blockchain technology, they could drastically reshape many aspects of daily life and society. There are many opportunities that the use of these represents, but according to the authors various critical issues remain, including: fragmented regulation, difficult communication between systems, costs, use for criminal purposes and as a geopolitical lever.

Villadei states that “the regulatory bodies must consider this possibility, be ready for any responses or emergency plans, especially in the face of recent events where sanctions and” financial war “are used on the agenda”.

Despite the dangers, blockchain today aims to involve all industries worldwide so it is not surprising that the strong growth in investments in blockchain solutions around the world, which according to the International Data Corporation (January 2022) will reach 11.7 billions of dollars this year.

The benefits for banks and citizens

The advantages that can be derived from the use of crypto currencies and the blockchain have triggered many international initiatives to integrate the world of blockchain with that of traditional financial systems. In Asia, for example, China is experimenting with the possible use of a digital currency similar to the Yuan, but at a European level, but at a European level, Italy is the pioneer country in the use of blockchain technology. The “Spunta DLT” project developed by the Italian Banking Association in 2020 and coordinated by ABI Lab in concert with Not Data, Sia and R3 and Corda Enterprise platform, is a network that includes about 100 Italian banking institutions (including Banca Mediolanum, Banca Monte dei Paschi di Siena, Banco BPM, BNL BNP Paribas, UBI Banca, and Unicredit) who use the Spunta DLT network with the aim of making mutual reporting more fluid and secure through blockchain technology. Specifically, it allows to automatically intercept non-matching transactions using a shared algorithm, standardizing the communication forum and allowing clear reporting of transactions between interested parties. In addition, using Check allows you to post reconciliation operations on a daily rather than a monthly basis. Not only that: the Spunta allows Italian banks to participate in studies of a possible digital currency.

Also noteworthy is the case of Intesa San Paolo, which has been analyzing blockchain technology since 2014. In 2019 the bank stated that the costs of adopting the blockchain were high and that its “mainstream” use was hampered by an uneven regulatory framework, but already in 2021 he highlighted how blockchain is transforming “activities related to the issuance and trading of financial instruments and represent an important opportunity for innovation in the management of financial assets.” the development of blockchain technology within its processes is the Bank of England (BOE) which in 2019 carried out an experiment to understand how blockchain could support a more digitized economy by including the possibility of distributing a virtual version of the British pound.

The BOE concluded that “… Central Bank Digital Currency could present a series of opportunity for the way in which the Bank of England achieves its objectives of maintaining monetary and financial stability ”.

The main advantages for citizens and companies from the use of these new technologies lie in greater transparency and efficiency, and in the reduction of costs, specifically: more protection of sensitive information, safer, faster and more reliable payments, lower transaction costs for users and companies. One example is letters of credit (LC): their use today is susceptible to fraud and each LC must be manually checked by banks. Now thanks to the blockchain, says Varun Bakshi, the Head of Products and Transaction Banking at RBL Bank, transactions that previously took “5 days can now be done in about 4 hours.” Additionally, Thomson Reuters has studied that 12% of companies in the United States changed banks due to delays in the KYC (Know Your Customer) process: storing their customers’ information in a “scattered” way combined with the use of a technology similar to DLT (Distributed Ledger Technology), increases security, speeds up otherwise cumbersome processes and thus influences customers’ willingness to use one specific bank over another. HSBC, Mitsubishi UFJ Financial Group and OCBC bank have collaborated with Bluzelle (decentralized server provider) to test the ” applicability of the company’s platform for KYC purposes: the study highlighted a possible reduction in management costs of up to 35-40%, as well as a greater ability to prevent fraud.

Knowledge of crypto currencies and blockchain technology: a survey

The authors carried out a survey by questionnaire in the Metropolitan City of Rome to understand how well the crypto coins were known among citizens. There were 127 participants in the survey, a number that, although not representative, is useful to contextualize to what extent and by age group crypto currencies and blockchain technology are known by the population.

When asked “have you ever heard of crypto coins (or crypto currencies)?”, 64% of participants replied “yes”, mentioning “Bitcoin” 95% of the time, “Ethereum” only 1%. Of the 127 respondents, only 2% were aware (albeit limited) of how blockchain and DLT technology works. The age groups of those who are aware of what crypto coins are are in 41% young people between 18-25 years and in 35% belonging to the 23-35 age group, which confirms that crypto currencies are more familiar to a relatively young audience, more influenced by the advent of “financial influencers”, many popular today on social media. The roots of this trend could lie in the distrust that the millennial generation and generation Z are affected by traditional finance, with triggers in the 2008 and 2014 crises. According to the CNBC Millionaire Survey 2021, about half of the generation millionaires millennials have at least 25% of their assets invested in assets such as crypto currencies and NFTs. All this is in stark contrast to the audience of so-called baby boomers, who hold less than 10% of their assets in assets of this type.

The risks of the blockchain: dark web and criminal organizations

“Cyber ​​crime finds a primary ally in crypto coins”, says Villadei, especially for corruption and drug trafficking crimes. According to Europol, money laundering is the predominant criminal activity in crypto crimes: the movements of virtual money are incredibly difficult to trace, there is a great ease of exchanging crypto currency for another or converting it into legal tender. Moreover, the recent advent of Bitcoin ATMs (or BATM), allows criminals to take advantage of liquid money (in crypto) wherever it is accepted by the counterpart, this opens up even more unpredictable and worrying scenarios. Also, the study Sex, Drugs and Bitcoin: How much illegal activity is financed through cryptocurrencies? (2019) concluded that 23% of cryptocurrency transactions have a criminal purpose. But the risks don’t stop there.

About 1.5 billion euros in crypto coins are spent every year on dark web platforms to buy drugs, prostitution, illegal activities (Europol). For Langer, “the most powerful weapon to combat crypto crime is a legislative reform that is uniform at a European and global level. The existence of jurisdictions that allow the unregulated (or poorly controlled) use of crypto currencies will act as an incentive to perpetrate crypto criminal activities “.

Not only that, the risk that cryptocurrencies are used as a geopolitical lever is very plausible. Given that some commodities are, for example, quoted only in US dollars (such as oil and gold), the risk could arise when a country producing and exporting a commodity no longer accepts payments in dollars, but only in crypto currency, and has created an ad hoc one, thus excluding the country to which it would like to inflict damage from the use of this asset. Furthermore, possible cyber attacks aimed at slowing down or affecting the “nodes” of the blockchain with the ultimate goal of making the blockchain system unusable, even if in a momentary time window, should not be underestimated.

Sports sponsorships and crypto coins

Many companies that offer crypto services are continually looking for ways to reach an ever-growing audience, which is why they have now become the most influential sponsors in the world of sport. GlobalData analyzed and concluded that the amount of dollars invested worldwide by crypto companies for sponsorship purposes increased from 17 million in 2020 to 605 million in 2021, a + 3,488%.

SponsorUnited indicates that to date there are around 180 cryptocurrency brands linked to sports sponsorship contracts and agreements, in 2019 there were around 29. The most significant case is the sponsorship of Crypto.com for $ 700 million at the Los Angeles Arena, while Coinbase recently signed a multi-billion dollar deal with the NBA. It should also be noted the increasing use of fan token clubs (FTC), virtual currencies designed for fans of a specific sports club that allow access to goods and services connected to the issuing club. The ultimate goal of issuing such financial assets is to allow clubs to raise cash from their supporter base without having to dent their capital structure.

The need for regulation

Banks have spoken out several times to request clearer and more coordinated regulation of the crypto phenomenon, even if what really worries the regulatory bodies is the attraction that crypto currencies have in people with poor financial literacy or a limited investment background. To encourage their best use, some countries such as China, Saudi Arabia and Turkey have defined which use of cryptocurrencies will be allowed and which will not. The first to embrace the advent of new currencies was El Salvador, which made Bitcoin a legal currency within the country’s borders.


The European regulatory framework is slightly more up-to-date than the American one. Regulators have provided a first way to discern how to regulate the use of cryptocurrencies based on their function. Specifically, if cryptocurrencies are used as a vehicle for speculation or investment, the regulatory framework governing European financial services (MiFID II) applies, while if they are used as a utility or payment token, the relevant regulations and laws apply. of each country.

For CB Insights, there are six banking areas that will be drastically affected by the blockchain: payments, which will be cheaper and faster; clearance and settlement systems, which will see faster and safer processes; fundraising, where the blockchain will be a revolutionary tool for raising capital in the market; securities, where shares and bonds can be “tokenized” by placing them on public blockchain networks; loans and credits, with the streamlining and lowering of the prices of the procedures; and trading, which is already heavily impacted by blockchain technology. It is therefore necessary to regulate that goes to respond to a phenomenon that presents considerable opportunities and as many risks, but which is unstoppable and exponentially accelerating.

The future of blockchain technology

Central banks are inclined to use digital currencies in order to make their function more effective, but it is difficult to think that institutions like the ECB will accept Bitcoin or other variants as substitutes for sovereign currencies in the future. On the other hand, it is extremely likely that major financial institutions will introduce a virtual version of their respective legal tender currencies. For this to happen, however, a more compact and homogeneous regulatory framework is needed to ensure that crypto currencies and the blockchain can be understood and used, acquire value, especially among the population.

In order to give strength to the use and to understand the advantages given by the expansion of the diffusion of blockchain technology and crypto currencies, security, speed, efficiency in use, high privacy standards are required, therefore a homogeneous, advanced and always updated regulation – increasingly necessary and potentially profitable – in order to take advantage of the benefits of the evolution of the world financial system.

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