According to the draft decree seen by Reuters, Italy is looking forward to introducing new rules to govern the new sector. These regulations, which are expected to be endorsed by the cabinet, will come with huge penalties for anyone who engages in the manipulation of the market or exploitation of information within the cryptocurrency market.
As per the latest law, sanctions for such cases will range from 5,000 euros to a maximum of 5 million euros, about $5.4 million. These actions result from growing concerns among central banks and international regulatory authorities about threats that virtual currencies may pose. These digital forms of money have no intrinsic value. They could potentially be problematic to the stability of the whole economy, especially the financial sector, and they are associated with fraudulent activities globally.
This legislative action is in line with a larger European framework that was implemented the year before to regulate the market of digital currencies, which had remained mostly unregulated until then. This market will be overseen by Italy’s central bank and Consob, the nation’s national securities regulator. Their major task will be to underwrite the stability of the financial market within which they operate.
Cryptocurrencies operate outside the conventional banking systems, making it possible for individuals across the globe to pay or be paid without necessarily using the banking systems. This is made possible through blockchain technology, which ensures that each transaction is well-recorded and documented. However, individual details of the parties involved are concealed, and what is visible is only wallet IDs – a string of alphabets and numerals that enables users to retain their identity.
The Italian government has recently introduced severe measures such as very high penalties to counter such illegitimate conduct as insider trading and market manipulation in the cryptocurrency sector. This proves that Italy is committed to trying to make the financial sector secure and dependable while at the same time embracing the shift towards virtual currency.
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