Italy to Introduce Crypto Regulations by 2024
Italy, a country renowned for its rich heritage and history, has seamlessly embraced the digital era. In Italy, cryptocurrency is not only legal but also well regulated. In this comprehensive guide by Coinpedia, we will delve into the legal aspects of cryptocurrencies in Italy in the year 2024.
Introduction
Italy has established a legal framework for cryptocurrencies and has actively worked towards regulating the crypto space. While there are currently no specific regulations pertaining to cryptocurrencies, the Italian government has been proactive in developing policies and regulations for digital assets through various regulatory authorities. It is important to note that there are no laws in Italy that restrict individuals from buying, selling, or holding cryptocurrencies. The Ministry of Economy and Finance (MEF) in Italy plays a crucial role in regulating cryptocurrencies and imposing taxes on them.
Regulation of Cryptocurrencies in Italy
Italy has been at the forefront of regulating the crypto space since January 2023. It is now mandatory for crypto companies to register with the Organismo Agenti e Mediatori (OAM). The OAM is responsible for:
1. Promoting transparency through a dedicated registry.
2. Ensuring compliance with Anti-Money Laundering (AML) measures.
Investors in Italy are advised to only engage with registered crypto firms. The governor of Italy’s central bank has recently stated that the country is preparing for the implementation of the European Union’s Markets in Crypto-Assets (MiCA) act, which focuses on regulating service providers in the crypto industry.
Financial Markets and Banking Regulation
Italy’s financial markets and banking regulators have had to adapt to the growing interest of Italians in cryptocurrencies. Statistics indicate that a remarkable 35% of Italian families have invested in crypto assets. Unlike some other European Union countries, Italy has chosen not to adopt domestic regulations specifically for crypto assets. Instead, they require firms operating crypto exchanges, crypto wallets, or providing other services related to crypto assets to register with a dedicated section of the Register of Financial Agents and Credit Mediators (OAM Register) for AML purposes.
Taxation Policy
In Italy, crypto transactions are subject to taxation. However, not all crypto activities are taxable. Certain transactions, such as purchasing crypto with Euros, holding crypto, and transferring crypto between personal wallets, are tax-free.
Crypto activities in Italy are subject to either Capital Gains tax or income tax. The budget for 2023 introduced a 26% tax rate on crypto gains exceeding 2,000 euros. Income tax includes municipal, regional, and national components. The national tax rate ranges from 14% to 43% based on an individual’s annual income.
It is important to note that Italy has a decentralized tax system, meaning that regional and municipal income tax rates vary across the country based on local considerations. Regional taxes range from 1% to 3%, while municipal taxes are often below 1%, depending on the region of residence.
Recent updates in tax guidelines allow individuals to offset losses exceeding 2,000 euros from crypto investments against profits. These losses can be carried forward for up to five years. This practice, known as crypto loss harvesting, can help reduce tax liabilities from year to year.
Conclusion
Italy is eagerly anticipating the implementation of the MiCA regulations in 2024. As scrutiny in the crypto industry increases, Italy is collaborating with the Bank of Korea to advance interoperability in distributed ledger technology (DLT) transactions for the European Central Bank’s retail Central Bank Digital Currency (CBDC) trials. This showcases Italy’s unique approach to the development of CBDCs. Since 2022, Italy has shown great adaptability to the evolving crypto sector, making it a safe and favorable nation for cryptocurrency activities.