Italy Approves National Blockchain Regulations — The Ball Is Rolling in Europe

The Italian government has revealed a set of blockchain regulations. This comes at a time, when European regulators, on the national as well as on the supranational level, have begun to take regulatory actions.

The Italian Senate Committee of Constitutional Affairs and Public Works has approved a decree that makes several changes to a previously proposed law. The law now specifically mentions the use of distributed ledger technology (DLT).

The decree marks the first regulatory move by the Italian government in the blockchain space. The Ministry of Economy and Finance of Italy had invited various parties to provide advice and suggestions for drafting the bill.

The bigger picture: European regulators are moving ahead

Before diving into Italy’s story, here is a quick review of what happened over the last two months in the European regulatory space.

On December 01st, G20 leaders signed a joint declaration to develop a regulatory framework for cryptocurrencies in accordance with Financial Action Task Force (FATF) standards.

One week later, seven European countries have formed the so-called “Mediterranean Seven.” Members of the group are France, Malta, Spain, Portugal, Cyprus, Italy and Greece. Their goal is to increase the usage of blockchain technology in healthcare, transport, land and company registry, education, shipping, and more.

Just before Christmas, France has issued a decree regulating the use of DLT in securities management.

In January 2019, The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have advised EU institutions to create Europe-wide common regulations for crypto assets.

Long story short: European governments have realized the need for blockchain regulations and Italy’s decree is a direct result of these developments. No country wants to lag behind in the international race for the brightest tech businesses.

Italy’s Deputy Prime Minister Luigi Di Maio said, “Emerging technologies such as artificial intelligence and blockchain are destined to radically change our lives, the society in which we live and the economic and productive fabric of the country. We have to decide which way to go.”

Italy’s proposed law covers the basics

The law amendment includes basic industry terminology for DLT-based technologies and smart contracts. It also states that documents recorded on a blockchain-powered digital ledger are legally valid at the time of registration.

The original version of the law already included several regulations for the crypto space. It states the responsibilities of service providers, including reporting requirements of exchanges to the finance ministry, and it clarifies what the government considers a cryptocurrency.

More regulations are likely to follow

As a next step, the decree has to get approval by the Italian Chamber of Deputies and the Senate of the Republic. Once the decree will be converted into law, the Agency for Digital Italy will define the technical standards for the use of blockchain technology as per the new law.

The government has also set up a 30-member Blockchain Advisory Board to investigate use cases for the technology in both the private and public sectors. Fulvio Sarazana, who is a member of the group, suggested that Italy is attempting to legalize transactions based on DLT.

Interesting in this regard is also a comment by Giuseppe Piero Grillo, a former party leader, “We’re working on a project, the so-called Blockchain for the encrypted information. It is very interesting — you have an algorithm and there are no intermediaries. If the Blockchain could be used in politics that would be very interesting, so if a parliament member you voted for does not follow the program he or she would be automatically expelled.”

So far, Italy has not emerged as a major blockchain player, and it’s unlikely that will happen anytime soon. However, it has become obvious that the ball is now rolling in Europe. After several countries have created national legislation, others will follow. And it’s just a matter of time until there will be pan-European legislation.