New Cooperation Framework Between Consob and Bank of Italy on Cryptocurrency Regulation
The Consob (Italian Companies and Exchange Commission) and Bank of Italy have established a framework agreement aimed at outlining their collaborative efforts in regulating the cryptocurrency sector. This agreement comes on the heels of the introduction of the MiCAR regulation, the European legislation governing cryptocurrency assets, which sets a pioneering global standard for digital asset markets.
The joint document released by these regulatory bodies is a direct response to Legislative Decree No. 129 of September 5, 2024, which aligns Italian law with the European regulation, thereby granting both the securities authority and the central bank with regulatory, informational, supervisory, and penalty powers over entities involved in the issuance and public offering of cryptocurrencies and other related service providers.
- Introduction of the Consob and Bank of Italy Framework on Cryptocurrencies
- Implementation of MiCAR: Key Components of the Agreement
Introduction of the Consob and Bank of Italy Framework on Cryptocurrencies
According to their announcement, the framework comprises four key guidelines. Primarily, it addresses how both authorities will exercise their regulatory powers in circumstances that require the issuance of advisories or agreements. Specifically, when preparing for consultations, each organization is required to share drafts of their regulatory texts with the other at least ten working days before commencing public consultation. The recipient of such drafts has a thirty-day window to provide feedback.
The second critical aspect of the framework highlights the exchange of information gathered during their respective oversight duties and collaborations with other European authorities. The timely transfer of this information is paramount. Regarding cryptocurrencies and tokens, Consob is tasked with sending relevant white papers and any pertinent data to the Bank of Italy. The two primary European authorities for transnational cooperation in this sector are the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA).
Implementation of MiCAR: Key Components of the Agreement
The agreement also focuses on the supervisory powers held by both Consob and Bank of Italy. It includes provisions for coordinating procedures for issuing authorization and revocation measures that require advisories or agreements. Both entities will mutually inform each other of inspection initiations and scope, while they provide completion reports once inspections are concluded. To enhance efficiency, the financial supervisory body and the Bank of Italy will streamline procedures for authorizing white papers and managing approvals, extensions, and revocations.
In cases where enforcement actions or detecting irregularities are necessary, the two authorities will coordinate communication efforts within seven working days following the action’s implementation. Specifically, the Bank of Italy will inform Consob about the removal of corporate executives, early intervention measures, and the initiation of extraordinary administration in situations involving banks that issue tokens linked to assets, payment institutions, and electronic money institutions authorized to issue these tokens.
When one authority requests a review from the other prior to any supervisory actions, the latter must respond within twenty days from the request. Conversely, the authority that made the request is obliged to notify the other within seven working days after executing the related action. Communication and information exchange between these organizations will be especially prompt in matters regarding the administrative liquidation proposals for specialized token issuers and service providers focused on cryptocurrency activities. This protocol may be amended or supplemented by mutual consent of both authorities whenever new regulations emerge.
