The Bank of Italy is preparing to publish detailed guidance on the implementation of the European Union's Markets in Cryptoassets Regulation (MiCA).
Fabio Panetta, Governor of the Bank of Italy, said during a speech to the Italian Banking Association (ABI) that he will soon launch a guideline on the implementation of the MiCA regulation, to provide banks and financial institutions with clear guidance on the application of the new cryptocurrency and digital asset regulations set out in this law.
During his speech, Panetta stressed that electronic money tokens, known as EMTs, are the only instruments that can serve as a means of payment, so the upcoming guidelines will mark a milestone in the implementation of MiCA in the country, without affecting the integrity of its payment system.
MiCA: EMTs and ARTs
In line with MiCA, Panetta stressed that this law only recognises two types of tokens as potential means of payment. The first of these are electronic money tokens or EMTs (Electronic Money Tokens), and the second are asset reference tokens or ARTs (Asset Referenced Tokens).
However, as mentioned above, the bank's governor stressed that EMTs tokens are the only ones considered suitable to serve as payment instruments and fully maintain public confidence in the current system. This conclusion is based on the assessment made by the Bank of Italy on these digital assets, Panetta assured.
EMTs, or electronic money tokens, can be issued by banks or electronic money institutions, he said, and their value is tied to a single fiat currency, offering greater stability and predictability than ARTs, whose value depends on multiple underlying assets.
According to Reuters, the publication of the next guidelines guide Italy’s MiCA bill seeks to preserve the smooth functioning of the current payments system, to protect stability while the country adapts to the new EU legal framework for cryptocurrencies.
Italy and the MiCA Law
The European regulatory framework for cryptocurrencies, MiCA, came into force on June 30. However, to date, Italy is still in the process of fully aligning itself with the new regulations for crypto assets.
MiCA was established to comprehensively regulate the crypto market in the EU, with the aim of harmonizing the requirements for companies and participants in this market, in favor of healthy and sustainable growth and development. Due to this, the publication of the guidelines announced by the Bank of Italy is expected to offer financial institutions and investors participating in the crypto market greater clarity on the use and issuance of cryptocurrencies and digital assets in the country.
Although EU member countries are not required to implement MiCA, Italy’s initiative demonstrates its interest and commitment to adapt to new crypto regulation and could have a significant impact on the cryptocurrency landscape in the country.
Innovating with blockchain technology
So far, the country has maintained a close relationship with cryptocurrencies, promoting a safe and transparent environment that can be integrated with its financial system. Cryptocurrencies are not banned in the country, and since last year, taxes have been levied on transactions with these digital assets. Italy passed a bill in December 2022 to levy these taxes and provide a clear definition to these digital assets in the country.
But, in addition to advancing regulation, Italy has also been focusing on leveraging the potential of these digital assets and blockchain technology to explore new opportunities. In 2022, it adopted Algorand’s blockchain technology to issue digital bank guarantees, and last year, it began exploring the DeFi ecosystem and asset tokenization through a pilot project in conjunction with Polygon Network and Fireblocks, which will help the central bank and institutions better understand the advantages, opportunities and risks of blockchain for the financial system.
