The chief of Italy’s securities regulator believes that waiting for EU rules on crypto is far too hazardous, and that Italy may have to go it alone.
The growing use of cryptocurrencies, according to Paolo Savona, chairman of Italy’s securities market regulator, Consob, has become a concern, and the government needs to create new legislation to govern it.
“Without effective oversight, market transparency, the foundation of legality and logical choice for (market) players, may deteriorate,” the Consob chairman stated today during the agency’s annual report presentation, which was live-streamed.
He cautioned that cryptocurrency might be used for crimes such as money laundering, tax evasion, terror financing, and kidnapping.
But, as Savona put it, “the genie is out of the bottle,” and “the authorities will not be able to bring it back in since it functions in an intangible world that can only be controlled by modifying the […] protocol.”
According to CoinMarketCap, there are more than 10,000 cryptocurrencies in circulation. Savona estimated that there are 4,000-5,000 cryptocurrencies in circulation without any type of regulation.
“When we consider Consob’s recent experience in shutting down hundreds of websites illegally collecting savings in Italy,” he continued, “the image that emerges is disturbing.” Consob shut down six illegal financial services websites in Italy last month, bringing the total number of illegal financial services websites in Italy to 457 since July 2019, including an exchange purportedly selling crypto backed by gold and diamond mining profits.
“If a European solution takes too long to come up with, [Italy] will have to adopt its own measures,” he warned.
A similar debate took place last Friday in the Netherlands, another European Union (EU) member state.
In an op-ed, Pieter Hasekamp, the director of the government-linked Bureau for Economic Policy Analysis, pushed for a “total prohibition on [the] manufacturing, trade, and even possession of cryptocurrencies” in the Netherlands. However, Wopke Hoekstra, the Dutch finance minister, dismissed Hasekamp’s demands, arguing that the country should stay to the regulatory path.
The European Commission, the EU’s executive branch, released its new Digital Finance package at the end of September, which included two regulatory proposals specific to crypto and blockchain: the MiCA Regulation and the Pilot regime for market infrastructures based on distributed-ledger technologies (DLT).
These two suggestions were mostly based on existing banking regulations, but with certain tweaks tailored to the European crypto business. However, these guidelines are far from being definitive.
The EU has yet to absorb the lessons learned from its two proposals and issue full-fledged laws this or next year. Savona, on the other hand, would prefer them much sooner.