The Bank of Italy has revealed plans to enforce the European Union (EU) Market in Crypto Asset Regulations (MiCA) into its traditional marketing system, marking new changes in its operational modalities.
This initiative is a welcomed development, as it will hasten cryptocurrency adoption while improving the payment system. Therefore, this insight will clarify the transformation process while highlighting and addressing possible fears and concerns.
Modalities of Implementation
In a speech addressing the Italian Banking Association (ABI), the Governor of Italy’s central bank, Fabio Panetta, showed concerns about the dwindling payment system. In addition, he projected possible solutions to circumvent the imposing threat.
While MiCA regulation recognizes viable payment systems, including Electronic Money Tokens (EMTs) and Asset-reference Tokens (ARTs), Panetta thinks otherwise. He noted that EMTs seem the better option as the public assets are safe without fear of inappropriate fund diversions. Panetta added that EMTs are linked to a single officially recognized currency, whereas ARTs are associated with multiple assets.
MiCA Regulations Overview
In the final draft of the MiCA regulations are measures aimed at maintaining the functionality of the market system. The standards include but are not limited to changes in liquidity provisions, confined recovery plans for crypto asset issuers, and changes in fund requirements. These Regulatory Technical Standards (RTS) provide specifications for a minimum level of crypto assets liquidity.
MiCA Regulation Impact On Bank of Italy
This strategic move by the Bank of Italy aims to create a stable and secure environment for cryptocurrency transactions. It also displays Italy's eagerness to incorporate crypto assets into their local financial market.
By extension, MiCA ensures long-term market stability and protection of assets and fosters a sustainable environment for crypto activities. Interestingly, a renowned company, Circle, recently disclosed the listing of its stablecoins, USDC and EURC, mirroring EU regulations and prompting others to follow suit.