Italy Is Establishing Crypto Environment That Complies With New EU Laws

Key Points:

• Ignazio Visco, governor of the central bank, stated in a speech on Saturday that Italian regulators have started establishing a supervisory framework in anticipation of European Union regulations for regulating cryptocurrency.
• According to polls conducted by the Bank of Italy, barely 2% of Italian households own cryptocurrency on average, and the market exposure of Italian intermediaries is likewise quite small.

Ignazio Visco, governor of the central bank, stated in a speech on Saturday that Italian regulators have started establishing a supervisory framework in anticipation of European Union regulations for regulating cryptocurrency.

During a speech on the state of the world economy in Milan, Visco discussed the significance of regulating cryptocurrency and provided an overview of ongoing global, European, and Italian measures. Due to the sector’s tenuous linkages to traditional banking and the slowing of Italy’s and the euro area’s economies, he added, the collapse of the crypto market last year had no “systemic effects” on “the actual economy.”

According to polls conducted by the Bank of Italy, barely 2% of Italian households own cryptocurrency on average, and the market exposure of Italian intermediaries is likewise quite small.

The Markets in Crypto Assets (MiCA) framework’s upcoming EU crypto laws, which are scheduled for a final vote in April, are being prepared for by the nation’s regulators. For cryptocurrency issuers and service providers, such as trading platforms, MiCA establishes licensing regulations. On establishing the “authorization and supervisory operations” outlined in MiCA, the central bank is collaborating with the Ministry of Economy and Finance, local financial markets regulator CONSOB, and other parties.

Prior to the end of last year, the authority in charge of enforcing the mandatory registration requirement had not vetted the companies it had permitted to operate in Italy. The list featured 91 virtual asset service providers as of Monday.

According to Visco, the Bank of Italy is also engaged in several distributed ledger technology (DLT) projects, such as the EU’s own pilot for market infrastructure regulation.

The governor argued that there should be a differentiation between crypto “with no inherent value” and those that “divert resources from productive activity and societal wellbeing.” While these must be “seriously discouraged,” he continued, innovations that can boost the effectiveness of financial systems have to be encouraged.

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