On 20 July 2024, the Bank of Italy published a new Communication on the implementation of Regulation (EU) 2023/1114 on crypto-assets markets (MiCAR). This update represents a significant step towards harmonised regulation of crypto-assets in the European Union, with the aim of reducing regulatory uncertainty and ensuring market stability.
MiCAR regulation details
The MiCAR Regulation introduces a harmonised framework for the issuance, public offering and provision of services concerning crypto-assets. It identifies three main categories of crypto-assets:
- E-money tokens (EMT): aim to maintain a stable value by reference to the value of a single official currency.
- Asset-referenced tokens (ART): aim to maintain a stable value by reference to another value or right, or a combination of both, including one or more official currencies.
- Cryptocurrency‘other than’: a residual category that includes cryptocurrencies other than EMT and ART.
Important deadlines
- 30 June 2024: The rules on the issuance, public offering and admission to trading of EMT and ART will come into force.
- 30 December 2024: All provisions of the MiCAR Regulation will be fully applicable.
Communication Objectives
The Bank of Italy Communication aims to:
- Informing stakeholders about the new rules and the implications for their activities.
- Highlight the differences between the various categories of crypto-assets and their risk profiles.
- Promoting awareness of the potential risks associated with the use of crypto assets, in particular their suitability as a means of payment.
Differences between crypto-assets
The Bank of Italy stresses the importance of distinguishing between different types of crypto-assets. In particular:
- Crypto-assets ‘other than ‘ are generally considered unsuitable as a means of payment, especially if they are not backed by underlying assets (so-called ‘unbacked’).
- ARTs can fluctuate in value, making them less reliable as payment instruments.
- EMTs, on the other hand, are considered suitable for payment functions due to their stability linked to an official currency.
Implications for operators
Operators in the sector should:
- Ensure compliance with new anti-money laundering and anti-terrorism regulations.
- Ensuring transparency and correct behaviour.
- Assess the effects of their initiatives on the smooth functioning of the payment system.
National Regulatory Adaptation
At the national level, on 20 February 2024, draft legislative decrees to adapt the national regulatory framework to MiCAR and TFR recast were submitted for public consultation. The Bank of Italy and Consob will be designated as competent authorities for the supervision of crypto assets. In particular, the BoI will have competences in prudential supervision and transparency for issuers of EMT and ART.
Future implications
The BoI invites all interested parties to contact the relevant structures to initiate initiatives in compliance with the new regime. A further communication will be published to provide detailed guidance on how to transmit the documentation required for regulatory compliance. With this Communication, the BoI demonstrates its commitment to ensuring the stability and transparency of the cryptocurrency market, contributing to a safer and more regulated environment for all operators and users.
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