Italy launches "in-depth" review of cryptocurrency risks

Source: PortaldoBitcoin Original Title: Italy launches “in-depth” review of cryptocurrency risks Original Link: Italy has launched an “in-depth analysis” of retail investor exposure to cryptocurrencies as digital assets gain traction in traditional markets and fragmented rules complicate oversight.

The Macroprudential Policy Committee, made up of the governor of the Bank of Italy, insurance and pension regulators, and treasury officials, warned on Thursday (4) that risks may increase due to “growing interconnections with the financial system and regulatory fragmentation at the international level.”

The Ministry of Economy and Finance began the review to assess protections for direct and indirect investments in cryptocurrencies by retail investors, according to an official statement.

The review points to growing concerns in Europe that fragmented global rules are creating blind spots in oversight, especially as the US adopts more crypto-friendly policies and digital asset markets surpass $3 trillion, according to CoinGecko data.

“Divergent regulation of cryptocurrencies creates real risks,” Ruchir Gupta, co-founder of Gyld Finance, told Decrypt. “It pushes higher-risk activities into jurisdictions with weak oversight and obscures where financial exposures actually lie.”

Gupta expects “significant convergence by 2026” as the US clarifies its regulatory path, providing both a point of reference and economic pressure for others to align.

“Italy’s review shows that regulators are now examining the impact of cryptocurrency on financial stability, rather than treating it as a peripheral concern,” he added.

Aggressive oversight phase

The Italian committee’s announcement follows the Bank of Italy’s warning in April, which highlighted the increasing global integration of cryptocurrencies as a potential threat to financial stability.

The report cited the sharp rise in prices after Trump’s victory and his administration’s pro-crypto stance, warning that if digital instruments “become more closely intertwined with the traditional financial system, there could be greater vulnerabilities for markets and intermediaries.”

The bank also warned about conflicts of interest and governance gaps, noting that about 75% of companies holding significant Bitcoin positions are located in the US, with “negligible presence” in the euro area.

Europe is definitely “entering a more aggressive phase of oversight over fintechs and cryptocurrencies,” with Italy’s in-depth analysis being a “key escalation,” alongside the full implementation of the Markets in Crypto-Assets regulation (MiCA), Nitesh Mishra, co-founder and CTO of the hedge platform ChaiDEX, told Decrypt.

The EU’s regulatory push covers “stricter licensing and capital rules,” as well as tougher anti-money laundering (AML) guidelines, Mishra said, calling it “an important step” as the US still lacks clear frameworks and many island jurisdictions offer licenses with “minimal oversight,” creating global protection gaps.

For crypto providers in the region, compliance costs will rise with the need for robust governance, disclosures, and investor protections, but in return, companies will gain “regulatory certainty, ease of operation in the EU, and a competitive edge over firms located in more flexible jurisdictions.”

“Serious players will likely prioritize Europe as the gold standard, moving away from risky tax havens and serving retail users more safely,” Mishra added.