The Bank of Italy is considering releasing new guidelines to navigate the forthcoming European Union crypto regulations. The Bank of Italy Governor Fabio Panetta announced this significant development during a speech to the Italian Banking Association on July 9.
Italian Bank’s Crypto Guidelines
The new guidelines aim to ensure the effective implementation of the EU’s Markets in Crypto-Assets Regulation (MiCA) and safeguard the interests of virtual currency holders.
According to Panetta, MiCA divides tokens into two primary categories for payment purposes: electronic money tokens (EMTs) and asset-reference tokens (ARTs).
He emphasized that the Bank of Italy views EMTs as the only tokens that can truly function as a means of payment while maintaining public trust.
These EMTs are tied to a single official currency, such as a US dollar-backed stablecoin. In contrast, ARTs are pegged to multiple assets, like gold-backed tokens such as PAX Gold, also called PAXG for short.
In his speech, Panetta criticized well-known crypto assets like Bitcoin and Ether, referring to them as “unbacked crypto-assets.” He stated that these coins have no inherent value and that investing in them is like gambling.
Panetta expressed concerns that many investors are primarily motivated by the potential for quick profits. He believes they might use these tokens to bypass tax regulations and laws designed to combat money laundering and terrorist financing.
Panetta further argued that virtual currencies fail to fulfill the fundamental functions of money, which primarily include serving as a store of value, a means of payment, and a unit of account.
Despite acknowledging the relatively low number of investors currently engaged with unbacked crypto assets, Panetta warned that this number could increase.
Crypto Regulation in Italy
In line with MiCA regulations, the Italian government is ramping up its surveillance of crypto markets. A late June Reuters report highlighted that the country plans to impose hefty fines ranging from 5,000 to 5 million euros for violations. Notable offenses include insider trading and market manipulation.
Regulating crypto assets can be difficult for the country, considering the citizens’ strong enthusiasm for them. Unlike several other European nations, Italy chose not to establish its own comprehensive regulatory structure for crypto assets.
Instead, the country requires crypto services companies to register in a specialized section of the Register of Financial Agents and Credit Mediators for anti-money laundering purposes.
Also, rather than introducing its interim regulations, Italy has decided to wait to implement the MiCA regulation. Meanwhile, Circle, a global financial technology company, appears to have scaled through MiCA’s regulatory requirements.
A July 1 announcement revealed that the company has become the first global stablecoin issuer to receive regulatory approval under the MiCA framework.
Circle’s stablecoins, USDC and EURC, are now officially compliant with the new regulations. This move alleviates investor concerns about redeeming their stablecoins or shifting their funds to other digital assets to adhere to compliance standards.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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