The scudetto was created in the 1920s to honour the winner of the national association football league (in 1929 rebranded as Serie A) and the first team to wear it was Genoa in 1924.
Sources generally agree that Italian poet and playwright Gabriele D'Annunzio was the inventor of the scudetto.
Following this event, D'Annunzio proposed that the local football team acknowledge supporting the Italian sovereignty over the city with a tricolored shield of green, white and red on their jerseys.
[1][2] In 1924, the Italian Football Federation approved the decision to honour the defending champions allowing them to wear the scudetto on their jerseys.
Other countries including Portugal and Turkey also have their reigning champions wear a national symbol on their chests.