Italy's CONSOB: How is It Impacting Crypto in the Country?

The Commissione Nazionale per le Società e la Borsa (CONSOB) is the commission responsible for regulating the local securities markets in Italy. While many countries are accepting the arrival of crypto as a safe and legitimate way to trade and sell, Italy has long been struggling with the concept. With the dawn of Web3 steadily appearing on the horizon, it is fair to say that CONSOB’s take on cryptocurrency is an expected pushback for the currency’s scaling. After all, there are still some countries who would rather remain with a tried and tested formula rather than venture into the supposed abyss that is the blockchain.

Traditional banking has long used gold to simulate wealth, with stock markets and fund investments having been in play for several centuries. The London Stock Exchange was formed in 1801. That’s a whole two-hundred-and-twenty years’ worth of traditional trading, compared to cryptocurrency’s meagre fourteen years (the first Bitcoin white paper was published in 2008). 

By all accounts, cryptocurrencies like Bitcoin, Ethereum and DOGE are still in their infancy stage. To soar to new heights and take over the financial landscape, what they really need is a certified push from governmental bodies. Only then will they be able to spread their wings and achieve what they set out to achieve, but regulatory setbacks from organisations such as Italy’s CONSOB are not exactly going to help. 

So What Have CONSOB Done To Crypto? 

In April last year, CONSOB and the Bank of Italy released an official warning about the trading and operations with crypto assets. In this warning, they refer to the absence of a regulatory framework causing all kinds of risks for the user. From volatility, loss of legal and contractual protections and safeguarding of invested capital. As well as this, they also note the risk of losses from malfunctions, scamming and hacking. 

What Are They Citing Specifically?

They cite the lack of any authority being able to regulate any users which are abusive, unauthorized and unsupervised. This is due to crypto’s decentralized systems allowing anyone to trade, sell or invest. In order to provide regulated investment in Italy, authorization must be given by CONSOB themselves, but due to the decentralized systems that crypto uses, it is very hard to achieve this. A greater understanding of crypto is needed in order to understand why authorization and regulation is a deeper issue, not necessarily something which makes crypto inherently vague or troublesome. 

Are They Right To Resist The Crypto Surge?

No, but they are not the only ones resisting the surge. As mentioned before, the rise in cryptocurrency is an integral talking point in the world right now. While countries like El Salvador and CAR have embraced crypto with open arms, other countries such as Egypt, Bangladesh and Morocco have banned cryptocurrency completely. Like Italy, they have attempted to cite the ability of launderers to funnel money to illegal sources, as well as its ability to essentially destabilize their current financial systems. This last citation is telling, however, of governments who are simply resisting change. Elsewhere in China, cryptocurrency is banned due to energy usage. Yet coins like Ethereum have already directly dealt with environmental issues, moving instead to the more environmentally friendly POS strategy, and it is likely that the future will bring about positive change across the crypto landscape. 

Will Any Of This Change?

Most likely, yes. With countries like El Salvador and CAR pushing the integration of digital currency, it is likely that many countries, perhaps even Italy, will resolve to do the same. With Web3 due to introduce a decentralised internet landscape, the use of cryptocurrency as a legitimate way of trading is becoming more and more accepted. It is a question of when, not if, crypto takes over the traditional form of banking for a more streamlined, efficient way to invest and trade. 

The price of Bitcoin is billions of dollars higher than it was at its inception, and that is only expected to rise. Not least when one takes into account the updates and improvements that are set to take place over the next few years. Proof of stake, for instance, will deal with the energy problem which has thus far been derailing Ethereum’s scalability. ETFs will offer ways to invest in stock for people who are still hesitant to become actively involved in crypto. Also, various updates are constantly ongoing to alleviate any security issues which may arise.

But How Is Crypto Being Impacted Right Now?

Despite CONSOB’s statement issuing users to beware of cryptocurrency, there have been recent improvements in Italy’s crypto landscape right now. In March this year, the ministry of economy and finance set a decree for the provision of digital assets, introducing an enrolment programme into a special section of OAM, allowing them to monitor exchanges and implement anti-laundering controls. As well as this, Italy has been a pioneer in producing NFT art. This has been a fairly new commodity to traditional crypto trading, where artists can sell their art digitally in order for it to be traded on the blockchain, which has a hand in generating higher wealth for artists through the use of royalties. 

The growth of crypto may be stunted by Italy’s CONSOB (trading and investment are hampered by the search for regulation, and NFTs are unable to reach their full potential, despite the number of artists readily investing in the concept), but the truth is that it is still an ongoing presence, with dedicated users who CONSOB know will not go away. 

So The Future Is Bright?

Very bright. The fact is that cryptocurrencies exist on a decentralized system, which is a factor which makes them so revolutionary and ultimately a positive step for finance to begin with. This means that CONSOB’s warnings are only being registered by potential users (who will eventually be won around by global embracement) and those who are already invested. As mentioned before, it is a question of when, not if, crypto will continue to rise, even in Italy.

After more than ten years of valuation growth, it is easy to see crypto as a financial frontrunner. While CONSOB’s attempt to de-escalate and regulate crypto right now may have stunted growth, it most likely will not have long-term impacts on crypto when taking into account the bigger picture. Much like most of the world, governmental institutions are still trying to get their head around a digital financial landscape, but it is growing quicker than their ability to keep it in check.