Italy: Implementation of the Markets in Cryptoassets Regulation (MiCAR)

Why should I read this?

The Legislative Decree of 5 September 2024, no. 124 (the Decree) was published in the Official Journal of the Republic of Italy on 13 September 2024.  This Decree implements Regulation (EU) 2023/1114 on crypto-asset markets (MiCAR).

The Decree took effect on 14 September 2024 and applies from that date unless stated otherwise. MiCAR will be applicable from 30 December 2024, except for provisions concerning asset-referenced tokens (ARTs) and electronic money tokens (EMTs), which have been effective from 30 June 2024.

What do I need to know about the Decree?

Issuing and offering cryptoassets

The Bank of Italy and Consob (the Italian Companies and Exchange Commission) are the designated authorities responsible for supervision and control activities under MiCAR.  The Decree grants the Bank of Italy and Consob powers to ensure compliance with the conduct and organisational obligations set out in the Decree.

ARTs and EMTs

The Bank of Italy, in consultation with Consob, can authorise the issuance, public offering and trading of ARTs by:

• corporate non-financial institutions
• investment firms which are not class 1
• electronic money institutions
• payment institutions

Applications must be supported by notification of a white paper setting out the details of the cryptoasset. 

The Bank of Italy is entitled to receive MICAR applications for the issuance, public offering and trading of ARTs by

• banks
• class 1 investment firms

The application must be accompanied by a white paper which must be approved by the Bank of Italy.

Only credit institutions and electronic money institutions (known in Italian by the acronym IMEL) can apply to the Bank of Italy to issue and trade EMTs.  Again, the application must be supported by notification of a white paper.

Other cryptoassets

Consob is entitled to receive notification of white papers for the issuance, public offering and trading of all other classes of cryptoasset.

Cryptoasset service providers (CASPs)

The role of Consob

Consob can authorise firms which are not financial institutions or class 1 investment firms to provide services related to crypto-assets that are not equivalent to the investment services and activities for which they have been authorised under the MiFID Directive.

Consob can receive MiCAR applications from:

• central securities depositaries
• regulated market operators
• operators of wholesale trading venues for government securities
• investment firms which are not class 1

The role of the Bank of Italy

The Bank of Italy can authorise:

• electronic money institutions to provide cryptoasset services which are not equivalent to those ones provided  in relation to EMTs issued by the interested electronic money institutions
• payment institutions

The Bank of Italy can receive MiCAR applications from:

• banks
• class 1 investment firms
• electronic money institutions
• asset management companies

Transitional regime for Virtual Asset Service Providers

Virtual asset service providers (VASPs) and digital wallet service providers may continue their activities until 30 December 2025 or until they obtain the relevant authorisation, provided that:

• they are properly registered with the Italian Agents and Brokers Body (known in Italian by the acronym OAM) on 27 December 2024; and
• they submit an application for authorisation as a CASP under MiCAR in Italy or any other EU member state no later than 30 June 2025.

If authorisation is declined, they must terminate their contracts with Italian customers within 60 days.  

VASPs must notify the OAM that they have applied for CASP authorisation in order to maintain their registration. 

Those VASPs that do not intend to apply for CASP authorisation must cease to operate in Italy from 30 June 2025.

VASPs are required to publish on their website and transmit to their customers adequate information on the plans and precautionary measures they intend to adopt to comply with MiCAR or to proceed to an orderly termination of customer relationships, no later than 31 May 2025.

How Eversheds Sutherland can help

Eversheds Sutherland’s Global Crypto Assets practice comprises leading practitioners in the areas of financial regulation, technology and payment services with experience in shaping market standards in the crypto industry (both CeFi and DeFi) and navigating through the still developing legal and regulatory framework around products. This includes the categorisation/regulatory classification of tokens and the implication this has on the legal framework around the exchange, transfer or custody of those tokens. We have been involved in a number of large scale open banking projects employing DLT systems as well as advising governments, regulators and industry associations on drafting regulation and setting standards for various aspects around DLT use cases and business models, mostly in financial markets and services. These projects often include innovative forms of cooperation between regulated financial services providers and tech providers across several jurisdictions.