Blockchain to Protect Italian Products from Counterfeiters

25 March 2019

With a share of 20%, Italian tanners are the world's leading producers of leather. It is also the final destination of 22% of global leather shipments. However, while these figures are impressive, there is no doubt that the number of counterfeiters creating knock-off “Made in Italy” textiles is even larger.

From 2006 to 2016, 310 million counterfeit products were seized. The manufacturing of fake produce is said to be breaking Italian legislation through tax evasion, illegal labour and the financing of organised crime. In 2017 the total market value of counterfeit goods made in Italy reached €294m, and it mainly affected the clothing sector.

With the help of blockchain technology the Italian government hopes to solve the problem. Blockchain is set to curate the certification of the origin of materials and the composition of products, without ever losing the traceability of the links between the goods and their digital identities.

The project has been developed by IBM with the assistance of the MISE and trade associations. The blockchain initiative is designed to take care of the traceability of the entire textile chain, starting from the raw material to the finished product.

The transition from one point of the supply chain to another will be recorded in blockchain and will be visible to everyone. It will, therefore, become a natural cure against counterfeiting, preventing brands from losing their value in the legal market.

It should be mentioned, that the use of a QR code, which is a machine-readable optical label containing information about the item to which it is attached, is also being actively discussed. On 21 March, the interested parties will meet again to make a final decision that could lead to an experimental trial.

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