The Bank of Italy, through its governor Fabio Panetta, has issued harsh criticism of Bitcoin, questioning its status as a currency. This statement comes as the bank prepares to publish detailed guidelines for the implementation of the European Union’s MiCA regulation.
Rigorous implementation of the European framework
The new guidelines
In a recent speech, Panetta highlighted the Bank of Italy’s commitment to rigorously applying the MiCA regulation to protect cryptocurrency users. The bank distinguishes between two types of tokens:
- Asset Reference Fees (ART): Indexed to a diversified basket of assets, offering greater stability.
- Electronic money tokens (EMT): Backed by a single official currency, preferred for everyday transactions.
Doubts about Bitcoin
Panetta explicitly emphasized that only EMTs, linked directly to a fiat currency, can fully fulfill the role of a means of payment by maintaining public confidence. He criticized cryptocurrencies like Bitcoin for their volatility and inability to perform the three essential functions of money: medium of exchange, store of value and unit of account.
A cautious approach to the challenges of the crypto sector
Risks and regulation
The Bank of Italy maintains a vigilant stance towards decentralized cryptocurrencies such as Bitcoin and Ethereum, highlighting the potential risks of tax evasion and money laundering. In response, Italy has introduced severe penalties for infringements, with fines of up to €5 million for offences such as market manipulation.
Open to innovation
Despite this caution, Italy remains open to financial innovation. The Bank of Italy has launched a program to familiarize Italian financial institutions with the concepts of decentralized finance (DeFi) and tokenized assets, showing a receptiveness to new technologies while seeking to regulate them strictly.
Conclusion
The Bank of Italy’s criticism of Bitcoin marks a significant step in the regulation of cryptocurrencies in Europe. While reaffirming the risks associated with these assets, the bank is demonstrating its determination to structure and secure financial innovation. The upcoming guidelines will be crucial for the future of cryptocurrencies in Italy and beyond.
