Italian Government Providing $46 Million To Blockchain Projects: Has Italy's Attitude To Crypto Changed?

Two months ago, the Ministry of Economic Development of Italy announced that public or private research firms developing IoT, AI or blockchain-based technology are able to apply for government subsidies of up to $46 million. The cost of the undertaking ranges between $489,500 to $1.9 million and is part of the initiative to invest in technological innovation in the country.

According to Giancarlo Giorgetti, this is a way to support cutting-edge technologies with an aim to modernise production systems in a way that is interconnected, efficient, fast and secure. When it comes to blockchain projects, this can be seen as quite a turnaround, especially given Italy’s shaky relationship with cryptocurrency over the last few years.

The Relationship Between Italy And Blockchain

Since their inception, the price of Bitcoin and other altcoins have grown exponentially, meaning the number of crypto holders in Italy has similarly been on the rise. In 2021, Italy’s CONSOB responded to this by warning against the risks of trading blockchain-based assets. Being a decentralised technology, consumers were told to face the possibility of losing their invested money if they were to buy any blockchain-based assets, with the security and stability of regulated banks still recognised as being the optimum form of finance and trading. 

This, along with various attempts to regulate the rise of cryptocurrency – with no specified taxation, the Italian tax authority places crypto assets within the definition of other traditional assets – has led to a relatively rocky road to full crypto integration within the country itself.

This latest move, however, has been viewed as a positive step in the right direction. Although cryptocurrency is still a hard task for governments to get their head around, blockchain offers far more than just alternate digital finance. This move from the Ministry of Economic Development is a recognition of blockchain innovation and the role it could play in Italy’s technological future.

The Push Towards Innovation

The rise of NFTs – which stands for “non-fungible token” – was the first indicator that blockchain technology could actually be a positive development for Italy. Described as the “next Italian renaissance”, NFTs have been giving Italian artists and heritage sites a new way to interact and earn a sustainable income. Earlier this year, Milan-based tech company Cinello was awarded a five-year contract to generate digital versions of art from the Uffizi collection. The artworks were created in a deal certified on ETH and traded as NFTs with a price ranging between $114,000 to $284,000. 

While there have been issues with forging contracts in this regard, NFTs have shown considerable signs that there is a market for digital art and a considerable source of income for artists and museums alike. Although NFTs operate on blockchain, they differ from finance-based cryptocurrency, and there are plenty more blockchain-based projects which – if nurtured and supported – could put Italy on the map as an innovative technological hub in the run-up to Web3.

The subsidies could also be seen as an attempt to successfully bind crypto service providers under a single regulatory framework. In order to take the correct steps forward, Italy has recognised that it needs to support the crypto industry and allow it to build upon its community and technology to make the regulations viable.

The Future Of Italy And Blockchain

Over the years, countries across Europe and the world have become increasingly aware of the rise of blockchain and the subsequent move to Web3 – which is due to happen as early as 2030. Despite the current crypto winter, digital coins have also been predicted to rise even higher in value over the coming years – the price of Ethereum could even reach $30,000 by 2030 due to the recent pivot to POS. The tact, therefore, has changed from push to pull – as countries like Italy attempt to grow blockchain technology in order to innovate its own traditional industries. The fund is specific to manufacturing, tourism, health, environment and aerospace sectors. 

For the projects themselves, the burgeoning industry within Italy could be heavily beneficial when it comes to growth. Just a few months ago, leading Italy-based investment fund Iconium invested in OVER, which is a metaverse platform that curates AR and VR experiences. This enabling of a community-owned metaverse platform will effectively bridge the physical and metaphysical world through advanced geolocation, which is only possible due to the funding which has gone into it and the support of OVER’s innovation. 

With the Italian government offering $46 million in subsidies – depending on the type of project and how it might work for Italy’s economy – many more blockchain-based projects can be lifted and allowed to grow into leading technological companies. This will not only put Italy forward as a blockchain-based hub but also help it to eventually regulate and integrate the metaverse more definitively in the future.