Cryptocurrency regulation

Cryptocurrency Regulations in Italy

Written by: Qadir AK

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Apr 22, 2022

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Italy was one of the first countries to examine cryptocurrencies and tried to streamline their activities; cryptocurrency and foreign currencies are treated equally under Italian law. Italy ranks no 4 in the list of top countries using bitcoins. However, there is still no clear picture but the government’s determination in dealing with crypto and its activities can be talked about.

About 1.6 million Italians already use cryptocurrencies actively and millennials within the age group of 18 – 34 account for the maximum share.

Italy Crypto Regulations 2022

17/3/2022: Statutory Registration For Providers And Exchangers

The Italian Ministry of Economy and Finance (“MEF”) issued a new decree (“Decree”) requiring that virtual asset/currency service providers promptly enroll in a soon-to-be established special section of the register held by Organismo Agenti e Mediatori (“OAM”), with the aim of monitoring cryptocurrency exchanges and implementing anti-money laundering controls.

Pursuant to the Decree, the special section shall become operational by May 18, 2022, with a 60-day grandfathering period for operators already active in Italy

17/2/2022 : Italy Lays Out Crypto Firms’ New AML Requirements

On February 17, the Decree of the Ministry of Finance establishing the Italian register of cryptocurrency exchanges at the OAM (Organismo Affari in Mediazione) was published in the Official Gazette.Italy’s new rules include a requirement that doesn’t quite align with the EU’s ambitious passportable license for VASPs.

12/1/2022 : Italian Bank Backtracks on Crypto Ban

Milan-headquartered banking group UniCredit, which boasts 811.1 billion euros in total assets, has denied prohibiting its customers from trading cryptocurrencies, according to a statement issued on Wednesday.

Crypto Taxation

Taxation in Italy is still unregulated, Italian tax authority, Agenzia delle Entrate, has been trying to address taxation of crypto assets, by applying more relevant tax regimes. The Italian tax authorities are dependent on the “CJEU” Court of Justice of the European Union’s  to deal with the VAT regime of cryptocurrency. 

The CJEU further stated that virtual currencies must be treated as foriegn currencies for VAT purposes, hence crypto exchanges should be exempted from VAT pursuant to article 135,para 1, letter e) of VAT Directive 112/2006. Profits earned from cryptocurrency trading falls under corporate income tax (IRES and IRAP) included in a company’s financial statements.

Further the non-professional crypto asset trading regarding forex trading and personal tax purposes are applicable with capital gains taxation. If the individual is holding more than EUR 51,645.69 virtual currency in his/her accounts, individuals must also specify the cryptocurrency they are holding in e-wallets during their annual tax returns same as declaring their money held on their foriegn bank accounts.

Crypto Mining

Bitcoin mining may use more energy than all of italy by 2024, A researching team has warned that if people continue Bitcoin mining without checking for the energy consumption associated then it could reach 297 Twh per year by 2024, more than 290 TwH in electricity consumed by iTaly in 2019. Europe’s Sandali Handagama report explains how crypto mining firms like the Alps Blockchain uses renewable hydropower in the mountainous regions of Italy.

A Bitcoin miner verifies Bitcoin transactions adding more information blocks to the chain which in turn is rewarded with a Bitcoin payment. Miners have to discover a solution to a mathematical puzzle, the more computing power you have, the puzzles you will solve and in a result rewarded more.

Historical Events and Announcements

01-04-2021: SpaceX is going to put a literal Dogecoin on the literal moon. The DOGE-1 mission comes after mUsk, the self-proclaimed “Dogefather”, made his debut host on Saturday night the dogecoin price plunged 30% during Elon Musk’s SNL appearance.which fell 29.5%, dropping to 49%, During Elon Musk’s SNL debut.

06-10-2021: Using BitPay wallet one can now buy digital gift cards with Dogecoin and other cryptocurrencies, Dogecoin is now accepting online crypto payments. Accepted on website, mobile app, and in theaters.

22-09-2021: Dogecoin poll was highest ever in 24 hours 4.2 million views thinking that AMC should accept Dogecoin.Adam Aron tweeted about AMC planning to accept Dogecoin as payment that company has to figure out about adding the Doge on demand.

14-07-2021: Dogecoin’s Creator Jackson Palmer says that crypto is an inherent right wing, hyper capitalistic technology built to amplify the wealth of its proponents through a combination of tax avoidance.

10-06-2020: The European Union implemented a new law called the EU fifth Anti-Money Laundering Directive(5-AMLD) and Italy is one of the member nations expected to implement the law.  According to the directive, the cryptocurrency exchanges and the wallet providers are required to identify their customers through the KYC process and also register themselves with the concerned authorities.

22-03-2020:- Italian Bank Banca Sella, opens a Bitcoin trading platform called Hype platform, wherein the customers can trade Bitcoin through their accounts.

02-12-2019:- Italy government with 30 Italian experts team up to develop a regulatory framework to promote blockchain technology within the country.

23-01-2019:- The Italian Senate committees of Constitutional Affairs and Public works approved an amendment called ‘Decreto semplificazioni’. The amendment defined ledger-based technology called blockchain technology for the memorialization of documents. The Italian government is yet to approve this amendment

26-06-2017:- The EU is yet to approve the modifications done under AML4  proposed by Italy on 25 May 2017. The modifications included various articles specifically for virtual currencies and also to introduce a registry for Virtual currency exchanges.

02-09-2016:- Italy’s top tax authority, Agenzia Delle Entrate, released a new update in reference to digital currencies. It stated that purchases and sales made through bitcoin would be exempted from VAT. The document states ,” Traditional currency intermediary activities made with virtual currencies held by market participants are exempt from VAT, as they are among the transactions related to banknotes and coins.”

02-02-2015:- The Central Bank of Italy issued a directive again stating that cryptocurrencies can be used for illegal activities. But the businesses that store and exchange fiat currency to virtual currency are not required to comply with AML/KYC requirements. However, other virtual currency-related businesses are not included.

30-01-2015:- The Central Bank of Italy issues two directives warning about the use of virtual currency. The European Bank Authority also made its stance clear that any financial institutions should not buy or invest in any virtual currency until a formal legal framework is established.

11-07-2014:- Italian authorities issued Bitcoin warnings and also urged for regulation. In an interview, Attorney General of Rome, Luigi Ciampoli, said that Bitcoin could be used by criminals for money laundering, financing of terrorism or mafia activities. Also, an Italian financial police authority said in an interview that without any regulation, Bitcoin would be a powerful tool for illegal activities. Both urged for strict regulation on cryptocurrency.

18-01-2014:- Italian Parliament member Sergio Boccadutri revealed an amendment to a proposed law. This amendment would define Bitcoin and initiate a process to regulate cryptocurrency. The law also proposed the Italian government to the identification of the sender whose transaction exceeds 1000 Euros

Conclusion

Italy is one of the beautiful places to visit and also for cryptocurrencies as well. Cryptos being treated as legal can be used as a mode of payment. However, the government needs to work on the regulation laws, taxes, and mining more clearly and accurately.

Italy recognizes the potential of the cryptocurrencies to encourage illegal activities and hence the government is now spending more time in forming a regulatory framework, making it safer for the investors and enthusiasts.

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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