Italy Launches In-Depth Review of Crypto Risks Amid Growing Financial System Concerns
Italy’s Ministry of Economy and Finance has initiated an in-depth review focused on retail investors’ exposure to cryptocurrencies, assessing the safeguards surrounding both direct and indirect crypto holdings. This move responds to growing concerns highlighted by the Macroprudential Policy Committee, which warned of rising crypto-related risks arising from increasing interconnections within the financial system and fragmentation of international regulatory frameworks.
The review aims to address regulatory gaps emerging from fragmented global crypto rules as the market expands beyond a $3 trillion valuation. Earlier in April, the Bank of Italy noted that the growing integration of crypto with traditional finance could pose a threat to financial stability, citing governance gaps and the fact that approximately 75% of firms holding large Bitcoin positions are based in the United States.
Within Europe, regulatory efforts are intensifying with enforcement of the Markets in Crypto-Assets (MiCA) regulation, implementation of tighter licensing and capital rules, and stricter anti-money laundering guidance. While these measures raise compliance costs for providers, they also promise increased regulatory certainty and facilitate easier operations across the European Union through EU-wide passporting.
Analysts warn that divergent regulations across jurisdictions risk pushing crypto activities into regions with looser supervision. However, a convergence of regulatory approaches is expected by 2026 as the United States moves toward clarifying its stance. Italy’s comprehensive review marks a pivotal step in escalating EU fintech and crypto supervision, signaling a shift toward treating cryptocurrencies as a significant issue for financial stability rather than a peripheral concern. For providers operating in the EU, this could mean higher short-term compliance costs but a potential competitive advantage via clearer governance and unified market access.
