Italy sets up supervisory environment ahead of EU crypto laws

The governor of the Italian central bank, Ignazio Visco said that authorities in Italy have started establishing a supervisory environment in anticipation of European Union legislation governing crypto.

Supervisory environment despite very few Italian crypto holders

During his address on the world economic situation in Milan, Visco emphasized the need for crypto regulation and described ongoing global, European, and Italian activities. He said, despite acknowledging that most of the economies in Europe areas are decelerating, the fall of the cryptocurrency market last year did not have “systemic consequences” because it does not have huge connections with “traditional financial intermediaries, the payments system and the real economy.”

Visco cited studies conducted by the Bank of Italy that more or less only 2 percent of Italian households “hold these instruments, with modest amounts on average, and the exposure of Italian intermediaries to these markets is also very limited.”

Italy working with EU to create crypto laws

Nevertheless, Italy’s authorities are preparing for the future EU crypto regulations under the Markets in Crypto Assets (MiCA) framework, which are scheduled for a final vote in April. MiCA establishes licensing standards for crypto issuers, service providers, and exchange platforms. The central bank is collaborating with CONSOB, Italy’s authority responsible for regulating the country’s securities market, and the Ministry of Economy and Finance to implement the “authorization and supervisory actions” outlined in MiCA.

According to Visco, the Bank of Italy is also working on different uses of distributed ledger technology (DLT), such as the EU’s pilot for the regulation of market infrastructures.

The governor said that a difference should be made between crypto “with no inherent value” and those that “divert resources from productive activity and social welfare.” These must be “seriously discouraged,” he stressed, but innovations that may increase the efficiency of financial institutions should be encouraged.

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