Fabio Panetta, Governor of Banca d’Italia, emphasized the need for regulatory attention on crypto-assets due to their alleged use in illicit activities and potential risks to the financial system. He made this statement during his speech at the 31st ASSIOM FOREX Congress on February 15.
“The spread of crypto-assets requires the attention of the authorities, also because of their extensive use for illicit purposes,” said Panetta. “Regulatory arbitrage in this field may be particularly insidious and difficult to counter: some operators might exploit regulatory differences to adopt less-than-transparent or highly risky practices, In Europe, the revision of the Capital Requirements Regulation introduced a transitional regime for banks’ crypto-asset holdings, which reflects the spirit of the standard defined by the Basel Committee.”
According to Panetta, Italy’s central bank and securities regulator are actively engaging with crypto service providers to evaluate regulatory compliance and risk management strategies. He mentioned that the Markets in Crypto-Assets Regulation (MiCAR) aims to curtail speculative crypto-assets while ensuring investor protection. Panetta highlighted differences between European and U.S. regulatory approaches, suggesting that inconsistencies could allow crypto firms to exploit gaps, potentially impacting financial stability and market integrity.
Cryptocurrency transactions are recorded on public blockchains, which makes them more traceable than traditional financial transactions that often rely on less transparent banking systems. For instance, Bitcoin transactions are permanently stored on a transparent ledger, allowing authorities to track illicit activities. This was evidenced in 2021 when U.S. law enforcement recovered $2.3 million in Bitcoin from the Colonial Pipeline ransomware attack, as reported by Reuters. In contrast, illicit funds within traditional financial systems can be obscured through shell companies and layered bank transfers, complicating detection efforts.
Panetta is also a former member of the European Central Bank’s Executive Board, according to Banca d’Italia’s website. He has held significant roles in financial regulation and monetary policy, contributing to discussions on digital currencies, banking supervision, and financial stability. Before leading Italy’s central bank, he served as senior deputy governor of Banca d’Italia and played a crucial role in shaping European financial policy.
Banca d’Italia serves as Italy’s central bank with responsibilities including monetary policy, financial stability, and banking supervision within the Eurosystem framework. According to its website, it operates under the European Central Bank (ECB) framework and regulates Italy’s financial sector by ensuring compliance with EU banking regulations. The bank also oversees payment systems, implements anti-money laundering measures, and contributes to developing digital finance policies.
