Bitcoin has met few centralized establishment entities who are welcoming it with open arms. Countries like Russia, Ecuador, and Bangladesh have moved to ban it through regulation while countries like Canada and Australia take a more deliberate, and less fearful approach. Italy is taking a very original approach when it comes to what Bitcoin means to them and their central bank’s monetary policy. On January 30th, The Central Bank of Italy made an official statement on digital currencies, granting the use of crypto-currencies as legal within the country.
Italy Welcomes Bitcoin. Any Strings Attached?
The Central Bank used the opportunity to explain what a digital currency is, then referenced the Financial Action Task Force’s (FATF) research document outlining the issues that may potentially link digital currencies to money laundering and terrorism. They also linked to the European Banking Authority’s (EBA) warning in December for users of digital currency. At the end of it all, this is their official stance on Bitcoin and the like:
“In some countries they have been explicitly prohibited; in others have been provided some form of regulation. In Italy, the purchase, use and acceptance of payment in virtual currencies must be considered lawful activities.”
They have no plans to ban companies dealing in digital currency, but they did recommend that any companies doing business with Bitcoin-related companies should wait for official regulations from the EBA.
What is noteworthy about this acceptance of Bitcoin into Italy’s financial system by the Central Bank is the stance of Italy’s Financial Intelligence Unit. Usually, any currency sanctioned nationally will be subject to Anti-Money Laundering and Know Your Customer regulations. The FIU has excluded digital currencies like Bitcoin from these conditions of use. This is a curious move, given Bitcoin’s user-friendly design makes hiding assets and money laundering easy to perform, and Italy has little experience dealing with crypto-currency directly.
“Suppliers of functional activities with the use, exchange and storage of virtual currencies and their conversion to/in legal currencies are not, as such, addressed money laundering legislation and therefore are not required to comply with the due diligence requirements.”
The FIU suggested instead that any businesses dealing in this space educate their staff on the ins-and-outs of digital currency transactions. The more educated employees are, the more likely they can catch suspicious transactions in their systems.
With this liberal approach to Bitcoin coming to pass, Italy can position itself as a haven for people who want to operate Bitcoin businesses with little fear of over-regulation. Where others fear competition and innovation, Italy seems to see potential influxes of investment and job growth. More conservative governments either attack it out of fear or make regulations so onerous they scare investors and companies off.
As I’ve stated before, Bitcoin has as much potential as a business generator as it does as a global currency within any given country. Finding ways to work with Bitcoin may pay off, in the long run. Regulations can always be added later, on an as-needed basis. The next few years will prove very revealing when sizing up the winners and losers in Bitcoin research and development, and where businesses help sovereign economic growth.
Images from Wikimedia and Shutterstock.
Does this change your view of Italy? Will they regret or herald this move years from now? Share above and comment below.