Italian central bank set to introduce crypto guidelines

Banca d’Italia, Italy’s central bank, is looking to publish a crypto guideline in the coming months. This will help with the implementation of the upcoming Markets in Crypto-Assets Regulation (MiCA) regulations.

Fabio Panetta, governor of the Bank of Italy, said in a July 9 speech to the Italian Banking Association that the guidelines are ”aimed at facilitating an effective application” of MiCA.

He added that the guidelines will be revealed “in the coming days,” and will help “protect the holders” of some cryptocurrencies.

Italy not keen on allowing unbacked cryptocurrencies

MiCA clarifies the legal landscape in the European Union (EU) for stakeholders by classifying digital assets, defining regulatory parameters, and identifying responsible entities for enforcement.

It categorises tokens as electronic money tokens (EMTs) and asset-reference tokens (ARTs) and allows them to be used as a means of payment.

Per MiCA, issuers dealing with ARTs and EMTs require a license to operate in the EU. Further, they are also required to comply with certain requirements and guidelines set forth by the European Banking Authority.

EMTs have their value backed by a single official currency, such as the U.S. dollar, while ARTs are blacked by one more asset, such as gold.

However, Panetta noted that only EMTs can “fully perform the means of payment function while preserving the public’s trust.”

The central bank governor believes cryptocurrencies like Bitcoin are “unbacked crypto-assets,” which have “no intrinsic value.” He labelled dealing with such cryptocurrencies similar to gambling.

Panetta asserted that the “main objective” with cryptocurrencies is to sell the assets at higher prices. Further, crypto investors often leverage these assets to “dodge tax rules or the regulations in place to counter money laundering and terrorist financing.”

With this, he concluded that such assets “ do not possess the characteristics” that justify their use as a “means of payment, store of value, and unit of account.”

He stated that the number of investors dealing with “unbacked” cryptocurrencies without the knowledge of the risks involved is “low, but not negligible,” warning that it could “grow in the future.”

Previously, the Italian central bank had announced the establishment of a supervisory body in anticipation of MiCA. Further, the EU member state has also been considering crypto reforms of its own.

Per an earlier report, a draft legislation seeks to impose fines ranging from €5,000 to €5 million for crypto-related offences like insider trading. The framework also delegates oversight of the crypto sector to the Bank of Italy and market regulator Consob.

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