According to data acquired from a recent Bank of Italy survey, on the Libra media platform by the Facebook Project, participants expressed a variety of doubts about the nature of cryptocurrency financial tools, not only in terms of legality, but also for functionality. The survey shows that cryptocurrency is not able to fulfill the definition of financial assets. Further, the highly volatile nature of the price for cryptocurrencies keeps these assets away from being the same as conventional liquid currency. In addition, unlike conventional fiat money, convertible cryptocurrency in floating exchange rates, cannot be considered as a valid medium of transaction.
Despite concerns such as these, the country has not stopped including cryptocurrency from being examined by financial institutions in the country for anticipating trends and developments on the basis of liquidity risks, credit, market, and counterparty factors.
Tech Innovations to Gain Significance
The expenses related to the investments for technology and depreciation is growing rapidly at an approximate annual rate of 5.5 per cent. Of these investments, approximately half is used for operational processes, which will boost growth in increments. The rest is divided among government processes, support processes, and customer service processes.
The banks in Italy spend approximately 0.1% of the country’s GDP for their functions. However, increasingly the administrative powers in the country are looking to diversify by investments in new technologies including cryptocurrency and block chain in a variety of sectors such as healthcare, tourism, agriculture, and energy among others.
Experts project the first of trials in the field followed by cross border payments, and use of block chain tech within various sectors in approximately 10 years in the near future.
The potential applications of technologies such as cryptocurrency, artificial intelligence, internet-of-things, smart contracts, will become increasingly essential. These technologies can play a major role either in improving or deteriorating imbalance in Italy’s banking sector. Consequently, Italy will require to develop safe and efficient mediums to use the distributed ledger and block chain technology for money transfer purposes, while global tech giants such as Facebook, Amazon, and Google will play key roles in the near future.