Cryptocurrency Regulation in Italy

Italy occupies the mid-ground between crypto-friendly places such as Switzerland and extremely restrictive environments. Legislators promote innovations, however, demanding stringent consumer protection and integrity of the market. Investors, exchanges, and ordinary users should be aware of the rules of Italy: otherwise, high fines or license suspensions may be imposed. 

Three key bodies share the supervision. Financial stability is managed by the Bank of Italy, crypto-asset service providers are licensed by CONSOB (the market watchdog), and Agenzia delle Entrate is in charge of tax collection. Collectively they are constructing a regime intended to be business-attractive, EU-harmonisation under MiCAR and reducing systemic risk.

Historical Context 

Initial policies were reserved. In 2016, a tax resolution treated Bitcoin gains as foreign-exchange gains, and in 2017, Legislative Decree 90/2017 brought exchanges within anti-money-laundering regulation. The situation became clearer in 2019, as Decree 135 provided definitions of a distributed-ledger technology and smart contracts, paving the way to greater adoption. 

In 2024, the actual turning point came: instead of a planned increase of capital-gains taxation by 42%, legislators reduced the planned increase to 28 %, and Italy implemented the EU Markets in Crypto-Assets Regulation (MiCAR) through Decree 129. In every step, there is a gradual indication of moving beyond reluctance to organize the interaction with digital assets.

Regulatory Framework

 Key authorities

• Bank of Italy – prudential supervision, systemic-risk modelling, CBDC investigation.
• CONSOB – licences crypto-asset service providers (CASPs), markets abuse.
• Agenzia delle Entrate – provides tax instructions and examines returns.

Licensing/registration

Exchanges, custodians and other CASPs have to be registered with CONSOB and, by 30 December 2025, require an EU-wide MiCAR licence. Candidates lodge fit-and-proper tests, governance plans, and minimum capital (EUR 50,000 -150,000).

AML/KYC

CASPs use complete customer due-diligence, record-keeping, and suspicious-activity reporting of the AML Code of Italy. Transfers amounting to 1,000 or above must be verified with regard to the source of funds.

Taxation

The capital gain on crypto is taxed at 26% (lawmakers refused to decrease the rate in the discussion after 2024). Corporate tax is paid on the realised gain by businesses; VAT is not charged when crypto is exchanged into fiat.

ICOs, STOs, additional tokens

Security-like token offerings are within MiFID II and prospectus regulation. Non-MiFID utility tokens also need a MiCAR white paper. CONSOB is able to stop the sales which do not provide apparent disclosure of risks.

Italy Crypto Policies 

Usage -Crypto is not legal tender, yet it is legal to use as a means of payment. Cities will not be able to accept Bitcoin as tax. Retail uptake is still reasonably small but increasing.

Mining – Permitted, taxed as ordinary income to individuals and corporate profit to firms; no special energy surcharge.

Government projects -The Digital Sureties platform, powered by Algorand, allows banks and insurers to issue tamper-evident guarantees. The Bank of Italy is also testing a digital euro sandbox with the ECB.

Penalties – Insider trading, wash trading, or false-volume reporting incurs fines of 5,000 -5,000,000 euros, and it may be referred to criminal proceedings. Unauthorised operation of providing services attracts cease-and-desist and asset freezing.

Crypto Innovation Approach 

Italy has a FinTech Regulatory Sandbox that is overseen by the Ministry of Economy and the Bank of Italy. Start-ups will be able to experiment with blockchain payments, tokenisation, and DeFi lending in relaxed rules for up to 18 months. 

Large banks are testing on-chain settlement of bonds, and insurers are testing parametric cover with smart contracts. Retailers like Trenitalia take Bitcoin gift cards, and a number of SMEs already pay cross-border invoices using stablecoins. The government positions blockchain in terms of transparency, supply-chain traceability and SME funding.

Challenges and Issues 

Italian judges continue to make contradictory decisions regarding the legal status of crypto, varying between a “financial instrument” and a “fungible good.” That contradiction makes enforcement difficult. Offshore platforms that target Italians without having obtained a licence are also a challenge to regulators; the reverse-solicitation loophole in MiCAR is small, but difficult to patrol. 

The jury is still out in the court of public opinion: surveys indicate an increasing number of people getting interested in retail, but the popular press tends to focus on scams and unstable prices. Still, Statista forecasts 17 million Italian crypto users in 2026.

Essential Regulatory Trends and Prospects 

Recent developments – In 2025 the Bank of Italy sounded the alarm on stablecoin systemic risk and accelerated digital-euro implementation. The Italian regulator CONSOB provided guidance on staking-as-a-service, in which providers are custodians under MiCAR.

What comes next – Proof-of-reserves and real-time large-transfer reporting will be more tightly disclosed. Tax agencies can add pre-filled crypto sections to yearly returns.

Global influence – Italy being in compliance with MiCAR makes it a hub through which non-EU companies can obtain an EU licence. Its neutral tax policy has a potential to draw exchanges out of higher-tax jurisdictions to influence liquidity flows in Southern Europe.

Conclusion 

Italy offers a combination of blockchain friendly innovation and strong investor protection. predictability of licensing routes, reasonable tax rates and harmonisation at EU level reassure business, whilst large fines discourage abuse. Anyone trading or investing in Italian crypto markets would need to keep up with CONSOB communications and Bank-of-Italy discourses; the rulebook is changing rapidly, and being up-to-date with it today is a competitive advantage tomorrow.

FAQs

1. Is Bitcoin in Italy legal?

Yes. The acquisition, sale, and storage of Bitcoin are completely legitimate, albeit with the mandatory observance of tax declaration and anti-cash-laundering controls by CONSOB and the Bank of Italy.

2. What licence is required to operate a crypto exchange?

Any crypto-asset service provider has to get registered with CONSOB and, until 30 December 2025, has to acquire an EU-wide MiCAR licence or will be forced to shut down and face penalties.

3. Which taxes affect individual investors?

Any capital gain exceeding 2,000 in a given tax year is taxed at a flat rate of 26%. The gains can be set against losses, however trades and balances must still be reported on the annual return.

4. What tax does the government impose on corporate crypto gains?

Companies realise a gain which is treated as ordinary income and subject to Italy IRES and IRAP corporate taxes (total 29% approx.). Unrealised holdings, too, have to be marked to market, on a balance-sheet basis.

5. Is staking or yield products regulated in Italy?

Yes. MiCAR regulates staking-as-a-service as a custodial activity, meaning that providers must hold a CASP licence and segregate client assets whilst subject to stringent disclosure requirements.

6. Is ICO, STO, or utility-token sale permitted?

Allowed in transparent regulations. Security-like tokens are subject to MiFID II prospectus legislation, whereas utility tokens must have a MiCAR white paper; CONSOB is able to stop an offering that misleads investors.

7. What are the consequences of failure to comply?

Insider trading or wash-trading are market-abuse offences punishable by a fine of between 5,000 and 5 million euros, and/or criminal prosecution. The provision of unlicensed services may lead to asset freeze and injunctions.

8. Does Italy allow crypto mining?

Yes, mining is permitted without any special permit. The revenues are subject to taxation as business income, and miners are to be subjected to common environmental, zoning, and energy-consumption laws.

9. What is the Italian treatment of stablecoins?

Fiat-pegged tokens are permitted but heavily monitored; they require issuers to comply with MiCAR e-money token reserve, disclosure, and redemption requirements. Coins that are backed by dollars are subjected to additional investigation as a result of systemic-risk.

10. Will there be a digital euro in Italy?

Likely. The Bank of Italy is working with the European Central Bank on digital-euro pilots which may enter public testing as soon as 2026, providing a government-guaranteed alternative to privately issued stablecoins.

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