The Bank of Italy will soon issue new crypto guidelines in readiness of the MiCA regulation.
As the market for crypto assets (MiCA) rules take effect, the countries in the Eurozone have stepped up to comply with the new legislation. On Tuesday, the Bank of Italy announced plans to publish a new guideline for crypto that aligns with the MiCA rules.
Speaking at the Italian Banking Association (IBA), the Bank of Italy governor, Fabio Panetta, announced the need to comply with the MiCA rules.
Bank of Italy to Issue Crypto Guidelines Ahead of MiCA
MiCA seeks to harmonize crypto regulation in the European Union. This implies that EU member states will be required to align their crypto rules with MiCA principles.
The central bank governor asserted that the new guidelines aimed to outline the procedures for complying with the MiCA requirements. Also, the bank seeks to protect crypto investors from unfair business practices.
Under MiCA, Panetta noted that under certain conditions, MiCA treats asset reference tokens (ARTs) and electronic money tokens (EMTs) as payment methods. The EMTs are dollar-backed stablecoins, while the ARTs are pegged to PAX Gold.
Despite having similar features, the Bank of Italy observed that EMTs can operate as an effective payment method and still support the country’s payment system.
The bank noted that EMTs can only be issued by banks or virtual asset service providers (VASPs). With the MiCA rules, the Bank of Italy head confirmed that the proposed guidelines will provide clear procedures for EMTs in conformance with the new legislation.
Furthermore, the bank governor explained the need to improve the existing payment system under the new rules. He encouraged the policymakers to maintain the reliability and trustworthiness of the Italian payment system.
Italy Prepare to Comply with MiCA Requirements
Panetta believes that the proposed guidelines will help the Italians navigate the crypto market compliantly. The bank governor noted that most crypto investors engage in the buying and selling of crypto assets to generate returns.
Driven by their profit motives, crypto investors tend to bypass the existing tax rules and anti-money laundering measures.
Panetta illustrated that the desire to attain financial freedom prompted crypto investors to abandon the primary use of digital assets, which include units of measure, payment methods, and stores of value.
From his analysis, the bank head noted that Bitcoin and Ether were classified as unbacked crypto assets. This implies that BTC and ETH have no intrinsic value, exposing the trader’s risks. Panetta warned the Bitcoin and Ether investors about the risk associated with these assets, which are inevitable in the future.
MiCA Rule Take Effect
Citing the risk related to digital assets, the Italian financial regulators announced plans to increase regulatory scrutiny on cryptos. The proposed market surveillance is aimed at promoting compliance with the MiCA rule.
The regulators seek to punish individuals engaging in insider trading and market manipulation that is against the law. Notably, the Bank of Italy’s proposed guidelines for crypto assets replicate the regulatory approach taken by companies to comply with the MiCA rules.
A few ago, Binance announced plans to implement new rules for its European users ahead of MiCA regulations.
The crypto exchange explained that new rules aimed at enabling European customers to migrate from unauthorized stablecoin to regulated fiat-backed crypto. Binance anticipates that regulated stablecoins will flood the market after the MiCA rule takes effect.
In the meantime, Bin ance plans to revamp its product offering to comply fully with the MiCA. Remarkably, as other crypto firms prepare to conform with MiCA legislation, Circle was recently announced as the first stablecoin issuer to comply with the new regulation.
At the onset of July, the French regulators greenlighted Circle’s operational license as an electronic money institution (EMI). The approval of Circle’s EMI license allows the stablecoin issuer to offer USD Coin (USDC) and EURC tokens to European users.
With the approval of the Circle license under MiCA, the stablecoin issuer plans to open a minting platform in France that allows customers to mint USDC and EURC.
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