Introduction
The Bank of Italy is developing guidelines for stablecoin regulation. These guidelines will align with the European MiCA regulations. The central bank governor has consistently criticized digital assets.
Alignment with MiCA Regulations
Contrary to popular belief, MiCA does not introduce entirely new rules. Instead, it strengthens existing ones from the Electronic Money Directive (EMD). The Bank of Italy will soon publish guidelines on applying European Union rules to cryptocurrencies. Governor Fabio Panetta announced this during a banking association meeting.
New Guidelines Announcement
Panetta announced new guidelines during the Italian Banking Association (ABI) assembly. These guidelines will align with MiCA and primarily concern stablecoins. Stablecoins fall under the new categorization of electronic money (EMT). EMTs are linked to the value of a specific official currency, making them suitable for payments.
“In the next few days, we will publish a communication to the market on this matter,” Panetta said. This aims to preserve market functionality and safeguard holders of these instruments.
EMTs and Public Trust
Panetta clarified that only EMTs can fully perform payment functions while preserving public trust. Only banks and electronic money institutions can issue EMTs. EMTs are anchored to the value of a legal tender currency and protected by specific rules. These rules ensure the value of funds paid and guarantee reimbursement at nominal value at any time.
Panetta’s Stance on Cryptocurrencies
Fabio Panetta is a prominent critic of cryptocurrencies. As a European Central Bank board member, he consistently criticized digital assets. Since becoming the governor of the Bank of Italy in 2023, his stance has strengthened.
Panetta is particularly concerned about the risks cryptocurrencies pose to retail investors. He argued that these assets lack inherent value and do not generate income like traditional investments. Additionally, he criticized the lack of regulation surrounding cryptocurrency exchanges. This lack of regulation potentially facilitates tax evasion and money laundering.
In conclusion, the Bank of Italy is taking significant steps to regulate stablecoins. These new guidelines aim to align with MiCA regulations and ensure market stability. Governor Fabio Panetta continues to voice concerns about the risks of digital assets, reinforcing the need for robust regulation.
