The Bank of Italy’s innovation hub picked a decentralized finance (DeFi) project involving Ethereum scaling network developer Polygon Labs and crypto infrastructure provider Fireblocks to help financial institutions dabble with DeFi and tokenized assets.

The Milano Hub, the Italian central bank’s center for developing innovative ideas in finance, will support the development of the so-called Institutional DeFi for Security Token ecosystem for six months, the press release said. The platform aims to help traditional financial institutions to experiment with security tokens and execute transactions using DeFi rails in a safe, regulated manner.

The initiative comes as central banks globally work on central bank digital currencies (CBDCs) and explore ways to incorporate blockchain technology into the existing payment system. Meanwhile, tokenization has become one of the hottest trends in crypto as TradFi institutions and digital asset firms are placing old-school instruments, including bonds and equities, onto the blockchain.

A Bank of America report said that tokenization “may reshape how value is transferred, settled and stored across every industry,” making transactions faster, lowering costs and creating a more efficient financial infrastructure.

Cetif Advisory, a consultancy spinoff of the Università Cattolica del Sacro Cuore of Milan’s Cetif Research Centre, will lead the platform’s development, coordinating the efforts of Polygon Labs, Fireblocks, tech developer Reply, legal and tax consultant Linklaters and web3 studio DVRS.

The project will involve Italian banks, asset managers and financial institutions, according to the press release, including the country’s largest banking group Intesa Sanpaolo, with more than $1 trillion (975 million EUR) in total assets under management.

“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,” Imanuel Baharier, general manager of Cetif Advisory, said in a statement.

The initiative does not have plans for commercial use, per the press release.