The governor of the Bank of Italy said that the regulator is exploring new ways to integrate blockchain and distributed ledger technology (DLT) into payment systems.
Ignazio Visco said that now the central bank is preparing for the entry into force of the law on the regulation of cryptocurrencies in the European Union (MiCA). The regulator is studying how DLT can increase the security of the financial system and protect confidential customer data. Wisco cited the main benefits by which DLT technology can improve the payment system: cost-effective international transactions and faster financial settlements.
In autumn, the Italian central bank announced its readiness to test DLT in banking, financial, insurance and payment services. The initiative was aimed at more efficient settlement and risk management, as well as the creation of legal norms for transactions using the blockchain. Visko noted that the Bank of Italy received 56 offers from 81 potential test participants, including from other European countries and Southeast Asia. In December, the regulator chose the Algorand blockchain from the applicants, on the basis of which a platform for the banking and insurance markets is now being created.
To develop a single European international standard for the safe use of DLT, the Central Bank cooperates with the Italian Companies and Exchange Commission (CONSOB), as well as with the Ministry of Economy and Finance. The Bank of Italy is also interacting with the Basel Committee, discussing possible approaches to reduce banking risks when using crypto assets. The Italian regulator also helped the Financial Stability Board develop general guidelines for stablecoin issuers, the governor says. These guidelines are scheduled to be published in mid-2023.
Ignazio Visco called for the creation of regulatory rules that would distinguish between high-risk instruments with no intrinsic value and instruments that can bring tangible returns.
In December 2022, the Italian authorities passed a law according to which traders are required to pay 26% of the profits received from trading crypto assets.
Source: Bits
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