The Actual And Potential Use Of Blockchain By Italian Entrepreneurs – Technology

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  1. OECD Report on Blockchain
    for start-ups and innovative SMEs

On 10th September 2020, the Organisation for Economic
Co-operation and Development (OECD) has published a report
(entitled “
Blockchain for SMEs and entepreneurs in Italy
“; the
Report), which illustrates the current use of the blockchain by
Italian start-ups and innovative small and medium-sized enterprises
(SMEs) that are developing Distributed Ledger Technology based
applications and infrastructures (DLTs).

In particular, the Report has as object (i) entrepreneurial
landscape, (ii) development of a blockchain eco-system, and (iii)
recent trends in regulations and policy, in Italy.

1.1 The entrepreneurial landscape

The Report provides for an overview of the Italian start-ups and
innovative SMEs particularly in terms of their size and
productivity, in comparison with other OECD countries.

In particular, Italian business sector is characterised by a
very high number of SMEs, with a predominance of micro-enterprises
and a relatively low share of medium enterprises. In Italy, SMEs
account for 99.9% of the total business. According to the OECD,
although the number of Italian SMEs has decreased by 4.0% between
2010 and 2017, they still have a higher level of productivity than
the OECD average.

However, although the digitalisation of the afore-said sector
has been object of a number of recent initiatives launched by the
Ministry of Economic Development (the Ministry), the same is still
too low, mainly,  due to the difficult access to digital
infrastructures by the companies in question.

In particular, Italian SMEs seem to lag behind in exploring the
potential of big data and adopting cloud computing solutions.

1.2 The development of a blockchain eco-system

Italy is well positioned to access the benefits of DLTs due to a
large, diversified and export-oriented economy, which favors the
development, testing and adoption of blockchain solutions in a
variety of sectors. Besides, the adoption of digital technologies
can improve firms’ productivity.

Nonetheless, the Report shows that only a few companies in Italy
have an in-depth knowledge of DLTs, and, more specifically, of
blockchain applications.

Among the above companies, innovative SMEs stand out for having
been long active in testing DLTs with the intention of putting them
at the service of different sectors, such as supply chain
management, intellectual property and copyright protection, human
resources, as well as public procurement. Leveraging data from the
Ministry and the academic research centre (“Osservatorio
Blockchain & Distributed ledger
” of
Politecnico of Milan University), OECD has identified a
total of 67 companies, based in Milan and its surroundings, whose
goal is to develop DLT-based market products (excluding
crypto-exchanges and wallet providers), which suggest some solution
for removing barriers to the development of blockchain
applications, as follows:

  • complying with regulations, since the
    EU and Italian regulatory frameworks on DLTs are still too

  • lightening the complexity of relevant
    administrative procedures;

  • strengthening the financing channels,
    which are still scarce due to the limited access to venture capital
    funding, negligible use of Initial Coin Offerings (ICOs), and lack
    of definition and availability of public financing solutions.

1.3 Recent trends in regulations and policy

The Report also provides for a brief overview of the national
policy framework and programmes relating to DLTs. While Consob
(Commissione Nazionale per le Società e la Borsa;
the national financial markets authority) and the Bank of Italy
have been working lately on how to effectively regulate
crypto-assets (the first and most widespread application of
blockchain), the Ministry has launched the following initiatives
aimed at promoting a long-term view of the development of the

  • the appointment of a group of thirty
    experts (e., legal experts, engineers, economists, and
    academics, who share a consolidated experience in the field of
    technologies), whose task is to draft a national strategy on

  • the review of Invitalia (Agenzia
    nazionale per l’attrazione investimenti e lo sviluppo di
    ; the national agency for the attraction of investments
    and undertakings’ development)’s
    “Smart&Start” program with a view of simplifying it
    so as to provide incentives to innovative start-ups, including
    those focusing on blockchain; and

  • the launch in 2019, together with
    Cassa Depositi e Prestiti (CDP), of the “CDP Venture
    Capital Sgr – Fondo Nazionale Innovazione“, in
    order to stimulate the venture capital market in Italy and unleash
    innovation (including through the use of blockchain).

Finally, the Report lays down a set of actionable policy
recommendations addressed to the Italian Government, which are
based on OECD’s analysis and international experience, and
aimed at enhancing the diffusion of DLTs in Italy. In particular,
OECD suggests (i) to promote the development of digital skills
among SMEs’ executives and managers, in order to create a
virtuous cycle that would strengthen SMEs’ awareness on this
topic, as well as (ii) to cooperate at national and international
level so as to ensure coordinate actions in this
highly-technological market sector.

  1. Conclusive

The challenge of creating a DLTs eco-system in Italy can only be
met by increasing the level of digital culture among both citizens
and interested companies.

In this regard, a stronger cooperation between the relevant
business sector and the professional and academic worlds, would
likely favor the development of advanced research systems on the
possible industrial applications of DLTs, while helping the
training of qualified skills. This should, in turn, promote the
long-awaited establishment of the blockchain eco-system, which
represents the first step towards a real digitalisation of the
Italian business environment.

Originally published by Carotenuto Studio Legale, September

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