Italy's Central Bank Engages Crypto Providers Amid Global Scrutiny

Italy's central bank and securities regulator are engaging with crypto service providers to ensure adequate safeguards against financial and cybersecurity risks, according to Bank of Italy Governor Fabio Panetta. Panetta discussed key issues related to crypto assets, digital finance, and cybersecurity risks at the 31st Assiom Forex Congress on Feb. 15.

The crypto ecosystem is under global regulatory scrutiny due to risks including money laundering and financial stability concerns. While Europe has adopted the Markets in Crypto-Assets Regulation (MiCA) to protect investors, the United States continues to regulate crypto on a case-by-case basis depending on whether assets are classified as securities.

Panetta pointed to the differences in approach between Europe and the US, noting that the Trump administration's executive order on digital financial technology, issued on Jan. 23, suggests an inclination toward integrating crypto assets into the financial system. He warned that crypto operators may exploit regulatory differences and hamper the integrity of the financial system.

The Bank of Italy and Commissione Nazionale per le Societa e la Borsa (Consob) are in discussions with crypto service providers that intend to operate in Italy. The duo is ensuring that these entities have adequate safeguards in place to manage strategic, operational, and financial risks, as well as risks linked to money laundering and the circumvention of international sanctions.

Panetta wants global regulations to prevent tech giants from circulating digital tokens via easily accessible online payment platforms. He warned against consequences to the fiat financial system if privately issued tokens were to attain widespread adoption.