Discover the outcomes of the cryptocurrency legislation roundtable in Italy, where discussions revolved around establishing a national registry for tokenizing financial assets.
A roundtable debate on crypto legislation in Italy was held at Palazzo Montecitorio in late May. This table gave rise to the concept of creating a national provider registry with a focus on tokenizing corporate financial assets including stocks, bonds, and debt securities. In reality, the meeting’s main objective was to specify the parameters for the creation of a platform for holding financial products on blockchain, in accordance with European Commission Regulation 858/2022, which is specifically devoted to markets for the exchange of digital financial instruments.
Italy’s new crypto law
The need is brought on by the recent regulation of the DLT market, which has allowed institutional firms to enter new markets within the cryptocurrency industry.
In fact, 2023 is both the first year that a new, particular Italian law governing the taxation of cryptocurrencies enters into effect and the year that the final version of the MiCA, a new European Union regulation on digital assets, is passed.
Financial institutions who had previously avoided the cryptocurrency sector out of concern for, primarily, the lack of regulatory clarity on the subject, are now entering it thanks to the latter, which is really doing so.
Even the major players in European finance can now enter the market in large numbers as the picture appears to have grown clearer.
This is also true in Italy, where a number of conventional banks have already expressed a desire to take some sort of action involving digital assets.
The tokenization industry
Tokenizing real assets is one of the things that is now possible without concern about non-compliance.
Financial institutions aren’t the only ones who should be interested in this; businesses could also be affected, particularly those who are typically barred from the stock markets due to their exceedingly small size, which makes it very difficult or impossible for them to land.
However, regulations are necessary to provide investors with the confidence that the tokens they purchase genuinely correspond to tokenized assets. It appears that these controls will be implemented through the creation of a new official register, to which platforms that enable the buying and selling of tokenized assets will be required to register.
The FinTech Regulation
The Senate has already adopted the so-called FinTech Decree (Decree-Law No. 25 of 2023 – FinTech), while the House is now reviewing it. The regulation specifies and controls the issuance and transfer of digital financial instruments.
Additionally, it creates a regulatory sandbox where the Bank of Italy, Consob, and Ivass can communicate with other market participants and supervised intermediaries.
The Chairman of the VI Finance Committee of the Chamber of Deputies, Marco Osnato, described it as “an important innovation that will help financial markets, protect citizens, and find a tool that the Public Administration can also use tomorrow” at the meeting at Palazzo Montecitorio.
Comments on Italy’s new crypto law
Companies and independent contractors who attended the meeting and voiced their opinions.
Thomas Lacchetti, the founder and CEO of Fleap, stated that the potential of DLT and smart contracts can make it simpler and more effective to standardize businesses’ procedures and goods in order to raise money in the market, hence generating a more receptive market.
In the future, businesses will be able to operate pro-actively inside the marketplaces for digital assets to seize new opportunities.
“We believe that one of the goals of this standard is to introduce DLT within the processes of SMEs, and we are aligned with this vision. Underlying the development of our platform is the belief that this technology can become a tool with which companies will become more efficient and ready to face the new challenges that the market will present them with.
The changing nature of credit, new sources of capital supply, and faster processes in managing corporate actions. All this fits perfectly into the logic of DLT from which we can start to create the 2.0 company.”
Alessandro Negri della Torre, the founder of LX20 Law Firm, stressed the adaptability of the Italian legal system and its devotion to technology advancements in contrast.
The creation of a register would physiologically lead to the creation of a minimum level of organization of entities wishing to offer the service of record keeping, as well as a general consistency of their internal procedures. The introduction of a business reservation should then lead to the application of an initial filter that selects firms with the resources, human, technical and financial, to carry out the activity of register manager.
Marco Cuchel, president of the National Association of Accountants, underlined that the Fintech Decree’s passage into law will give Italian businesses new opportunities to obtain finance through non-traditional channels.
The new regulation of the digital financial market allows the issuance and circulation of related instruments, aligning with European forecasts, in maximum transparency, efficiency and security for investors and favoring the competitiveness of Italian companies.
The digitization of processes for the issuance of new financial instruments, including by means of emerging technologies, can create added value and synergy among the various parties directly involved and their professionals who assist them, including lawyers, notaries and accountants. It is truly an opportunity that we hope the market will seize favorably and use to its full potential.