Introduction to Italy’s Crypto Regulations
Italy’s central bank is about to publish guidelines on the way to apply the European Union’s incoming crypto rules. According to Bank of Italy Governor Fabio Panetta, these guidelines will likely be released "in the approaching days" and can aim to facilitate an efficient application of the EU’s Markets in Crypto-Assets Regulation (MiCA). The predominant goal is to guard the holders of some cryptocurrencies.
Understanding MiCA and Crypto Tokens
MiCA outlines two primary categories of tokens that will be utilized in payments: asset-reference tokens (ARTs) and electronic money tokens (EMTs). However, the Bank of Italy has found that only EMTs can fully perform the technique of payment function while preserving the general public’s trust. An EMT’s value is linked to a single official currency, resembling a United States dollar-backed stablecoin. On the opposite hand, an ART’s value is pegged to at least one or more assets, just like the gold-backed token PAX Gold (PAXG).
The Difference Between Backed and Unbacked Crypto-Assets
Panetta noted that some cryptocurrencies, like Bitcoin (BTC) and Ether (ETH), are examples of "unbacked crypto-assets" with no intrinsic value. He claimed that these assets are akin to of venture and that their predominant objective is for investors to sell them at higher prices. Additionally, he stated that some investors may use them to dodge tax rules or regulations in place to counter money laundering and terrorist financing.
The Risks of Unbacked Crypto-Assets
Panetta emphasized that unbacked crypto-assets don’t possess the characteristics that make them suitable to perform the three inherent functions of cash: a method of payment, store of value, and unit of account. He also mentioned that the variety of investors in these assets who won’t know their risks is low but not negligible, and their numbers could grow in the long run.
Increased Surveillance and Fines
In late June, it was reported that the Italian government plans to extend surveillance on crypto markets to comply with MiCA. A decree showed that fines starting from 5,000 euros ($5,400) to five million euros ($5.4 million) will likely be imposed for violations resembling market manipulation to insider trading.
Conclusion
In conclusion, Italy’s central bank is taking steps to control the crypto market by publishing guidelines on MiCA and increasing surveillance. The predominant goal is to guard investors and make sure that crypto-assets are utilized in a secure and secure manner. By understanding the differences between backed and unbacked crypto-assets, investors could make informed decisions and avoid potential risks. As the crypto market continues to evolve, it is important to remain informed concerning the latest regulations and guidelines to make sure a secure and secure investing experience.
