PILL n. 06–2024

16/04/2024

Crypto-asset regulation in Italy in the Micar era

D. Varani, R. Canossa

On 22 March 2024, the consultation on the draft Legislative Decree (henceforth the “Decree”) adapting the national legislation to the provisions of Regulation (EU) 1114/2023 (so-called MiCAR – henceforth the “Regulation”) ended. The Regulation is applicable as of 30 December 2024, with the exception of the rules referring to Asset-Referenced Tokens (“ARTs”) and Electronic Money Tokens (“EMTs”), which are applicable as of 30 June 2024. By that date, the Member States will have to notify the Commission, the EBA and the ESMA of the sanctions and other administrative measures adopted for the implementation of the Regulation.

The Decree is expected to be issued shortly and will enter into force the day after its publication in the Italian official journal. This document provides a brief review of the main novelties of the Decree for operators. Follow our website and social media for updates on this topic.

1. Crypto-asset service providing – Transitional regime for Virtual Asset Service Providers (VASPs)

According to article 44 of the Decree, service providers “relating to the use of virtual currency” and “digital wallets” (so-called “VASPs”) currently registered with the special section of the OAM – Organismo Agenti e Mediatori (Register of Agents and Brokers), may continue their activity pursuant to Legislative Decree 141/2010 and the relevant implementing provisions, only if:

  1. they are registered in the OAM register as of 27 December 2024 and compliant with their position with the Organism; and
  2. have applied for authorisation as a CASP (Crypto-Asset Service Provider), in Italy (to Consob) or in another Member State, by 30 December 2024.

In this case, the activity may continue for a maximum of 10 months (October 2025) or until the authorization is obtained if earlier. If the application is rejected, a maximum period of 60 days is granted to allow for the orderly closure of relations with Italian customers.

For persons who do not intend to file an application as CASP by 30 December 2024, this date represents the deadline by which their operations in Italy must cease. By the same date, such entities must terminate the existing contracts and return crypto-assets and related funds to clients, according to the instructions provided by the clients themselves.

In addition, all entities registered in the OAM register are required by 1 December 2024 to notify customers and declare on their website how they intend to comply with the Regulation. Alternatively, if they do not intend to submit an application for authorisation to operate as a CASP, they must state how they plan to manage the orderly termination of existing relationships, specifying that the activity carried out towards customers – pending the granting of authorisation or the cessation of operations – will continue.

Finally, the Decree provides that the obligation to transmit data flows on operations currently provided for by Article 17-bis, paragraph 3, of Legislative Decree 141/2010, will cease to apply from the fourth quarter of 2024 (i.e., with the submission of the last flow for 2024) and will be replaced by the obligation to store the same information and to make it accessible upon request by the same subjects currently authorized to request it from the Organism.

2. Authorisation regime for the provision of crypto-asset services by financial institutions

Consob and the Bank of Italy are the competent authorities under Title V of the Regulation, and the authorisation regime sees the two authorities dividing their tasks in relation to the different types of financial institutions (see below).

Banks, brokerage companies (in Italian: società di intermediazione mobiliare or “SIMs”), e-money institutions (in Italian: istituti di moneta elettronica or “IMELs”) and asset management companies (in Italian: società di gestione del risparmio or “SGRs”), in relation to crypto-asset services listed under Article 60 of the Regulation, may transmit to the Bank of Italy or to Consob a communication for the commencement of crypto-asset in lieu of the submission of an application for authorisation to the competent Authority. According to the Decree, financial entities may submit communications or authorization requests on the day following the publication of the Decree and before the deadline for application of the Regulation (30 December 2024), provided that the start of operations will be possible from January 2025 and/or in any case after the expiration of the communication period or the granting of authorization to operate.

2.1 Bank of Italy competencies

The Bank of Italy receives the information referred to in Article 60, paragraph 7, of the Regulation communicated by banks, class 1 SIMs, e-money institutions and asset management companies, promptly forwarding to Consob a copy of the communication received and the attached documents.

According to article 63 of the Regulation, the Bank of Italy, having consulted with Consob, authorizes e-money institutions to provide services for crypto-assets that are not equivalent to custody and administration services on behalf of clients and transfer services on behalf of clients in relation to the EMT they issue, when a dedicated patrimony [1] has been established pursuant to Article 114-quinquies, paragraph 4, of the Consolidated Banking Act (in Italian: Testo Unico Bancario or “TUB”), in the manner and to the effects established by Article 114-quinquies.1, paragraph 5, and by Article 114-terdecies of the same Consolidated Law.

The Bank of Italy, having consulted Consob, shall authorise payment institutions to provide crypto-asset services pursuant to Article 63 of the Rules, when for the provision of payment services and related ancillary and instrumental activities a dedicated patrimony has been established pursuant to Article 114-novies, paragraph 4, of the Consolidated Banking Act, in the manner and to the effects established by Article 114-terdecies of the same Act.

2.2 Consob competencies

Consob receives the information referred to in Article 60, paragraph 7, of the Regulation, communicated by central securities depositories and SIMs other than class 1. Consob shall promptly forward to the Bank of Italy a copy of the communication received and of the attached documents.

Consob receives the information referred to in Article 60, paragraph 7, of the Regulation, communicated by regulated market operators, and promptly transmits to the Bank of Italy a copy of the communication received from operators of wholesale trading venues for government securities and of the attached documents.

Consob, having consulted the Bank of Italy, shall authorise, pursuant to Article 63 of the Regulation, SIMs other than class 1 to provide crypto-asset services that are not equivalent to the investment services and activities for which they are specifically authorised.

3. Issuance of ARTs and EMTs

As mentioned, with regard to ARTs, the Decree provides, as of 30 June 2024, that:

  1. the Bank of Italy, having consulted with Consob, shall authorise the issuance, public offering and application for admission to trading of ARTs by issuers who are legal persons [2] established in the Union. The application for authorisation must contain the information set out in Article 18 of the Regulation;
  2. credit institutions and class 1 SIMs that wish to issue, offer to the public or request admission to trading of ARTs, notify the Bank of Italy of this intention by providing it with the information contained in art. 17 of the Regulation and by drawing up a whitepaper that must be approved by the Bank of Italy after consulting Consob. On the other hand, SIMs other than Class 1 SIMs will have to go through an authorisation process to issue, offer to the public or request admission to trading of ARTs;
  3. as for e-money institutions, the Bank of Italy, in agreement with Consob, will authorise the issuance, offer to the public and request for admission to trading of ART, when a dedicated patrimony is established for the issuance of e-money, the provision of payment services and related ancillary and instrumental activities, as well as for the provision of crypto-asset services referred to in Article 60, paragraph 4, of the Regulation [3] ;
  4. for payment institutions, the Bank of Italy, in agreement with Consob, authorises the issuance, the offer to the public and the request for admission to trading of ARTs, when a destined patrimony is constituted for the provision of payment services and the relative accessory and instrumental activities.

With reference to EMTs, the issuance, offer to the public or request for admission to trading, as of 30 June 2024, is reserved to credit institutions and e-money institutions pursuant to Article 48 of the Regulation. The Decree provides, for this type of tokens, the application of Articles 114-bis, paragraphs 1 and 3, and 114-bis.1, paragraph 1 of the Consolidated Banking Act, unless otherwise provided for in Title IV of the Regulation. On the other hand, e-money institutions issuing EMTs are subject to the provisions contained in Articles 114-quater, 114-quinquies, 114-quinquies.1, 114-quinquies.2, 114-quinquies.3 of the Consolidated Banking Act, as well as to the relevant implementing provisions, unless otherwise provided for by Title IV of the Regulation.

[1] For the issuance of electronic money, the provision of payment services and related ancillary and instrumental activities, as well as the provision of services for the above-mentioned crypto-assets.

[2] In the form of joint-stock companies (in Italian: società per azioni or “SpAs”), limited liability companies (in Italian: società a responsabilità limitata or “SRLs”), limited partnerships by shares (in Italian: società in accomandita per azioni or “SAPAs”), and cooperative companies (in Italian: società cooperative).

[3] Custody and administration services on behalf of customers; transfer services on behalf of customers in relation to issued e-money tokens.

the Author

the Authors

Dott. Donato Varani

Dott. Donato Varani

Dott. Donato Varani