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The Bank of Italy is set to release guidelines in the coming days on how to apply the European Union’s new Markets in Crypto-Assets Regulation (MiCA), the central bank governor said on July 9, to ensure the smooth functioning of the payment system and protect cryptocurrency holders.

In a text speech to the Italian Banking Association, Bank of Italy Governor Fabio Panetta highlighted that while MiCA identifies two types of tokens—electronic money tokens (EMTs) and asset-referenced tokens (ARTs)—as suitable for payments, the Bank of Italy believes only EMTs, which are backed by a single official currency, can truly serve as a reliable means of payment.

The EU’s MiCA regulation, officially published in June 2023, has commenced its phased implementation. The initial phase, effective from June 30, focuses on regulating stablecoins, including ARTs and EMTs. The second phase, scheduled for Dec. 30, will extend the regulatory framework to encompass all other crypto-assets and service providers.

While the rules have yet to cover the remaining crypto types, Panetta criticized “unbacked” cryptocurrencies like Bitcoin (BTC) and Ether (ETH), stating they “have no intrinsic value” and are “in effect akin to a gamble.” He expressed concerns about their use for tax evasion and money laundering, emphasizing that they lack the fundamental characteristics of money, namely a means of payment, store of value, and unit of account.

The governor acknowledged that while the number of investors in unbacked cryptocurrencies who may be unaware of the risks is currently low, it could grow in the future. The central bank’s guidelines aim to address these concerns and ensure the safe and effective implementation of MiCA in Italy.

Last month, Italy reportedly intended to strengthen surveillance over risks tied to the crypto asset market. The measures will include fines between 5,000 euros, around $5,400, and 5 million euros ($5.4 million) for insider trading, unlawful disclosure of inside information, or market manipulation.

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