An overview of the cryptocurrency regulations in Italy

Italy, renowned for its rich history, breathtaking landscapes and delectable cuisine, has also made strides in embracing the digital era. But how can someone buy crypto in Italy? Is it legal to purchase cryptocurrencies in Italy?

Here is a quick guide with answers to the most common questions about crypto regulations and laws in Italy. The good news is that cryptocurrencies are legal in Italy. The country is welcoming toward cryptocurrency enthusiasts, with a legal framework in place.

Is cryptocurrency regulated in Italy?

Whether you’re new to cryptocurrency or have prior experience but lack knowledge of current regulations, rest assured that cryptocurrency is both legal and regulated in Italy.

While Italy has not yet adopted laws or regulations specifically about digital currencies, the Italian government has actively developed regulations and policies on digital assets through various institutions and regulatory authorities.

Indeed, no laws prohibit someone from buying, selling or holding cryptocurrencies in Italy. The Italian Ministry of Economy and Finance (MEF) plays a crucial role in regulating crypto, particularly in taxation. 

Since January 2023, Italy has been strengthening cryptocurrency exchange regulations by mandating that crypto companies register with the Organismo Agenti e Mediatori (OAM), fostering transparency through a dedicated registry, and ensuring compliance with Anti-Money Laundering measures. This implies that investors in Italy are expected to use only crypto firms that are registered in the country.

These developments are part of Italy’s larger effort to make cryptocurrency regulations compliant with the new rules of the European Union. Italy’s central bank governor has stated that the nation is getting ready for the EU’s Markets in Crypto-Assets (MiCA) regulations for service providers, which are anticipated to affect how cryptocurrency companies operate within the European Union.

How to buy cryptocurrencies in Italy 

This section explains how to purchase cryptocurrency in Italy through various methods, from choosing a secure exchange to engaging in P2P platforms or utilizing services offered by Italian banks, providing diverse options for acquiring digital assets.

1. How to buy crypto on a crypto exchange

To purchase cryptocurrency in Italy, begin by choosing a crypto exchange and setting up an account. Upon registration, deposit the required funds to acquire the preferred cryptocurrency. Bitcoin (BTC) and Ether (ETH), along with other widely traded currencies, are accessible on most major exchanges in Italy.

Choose a cryptocurrency exchange 

When selecting a crypto exchange, prioritize safety by opting for registered crypto firms, such as Crypto.com, Coinbase and Kraken, approved by Italy’s financial regulatory body, OAM. This approach ensures a secure and regulated environment for cryptocurrency transactions in Italy.

Additionally, ensure that the selected exchange facilitates the acquisition of the desired coins and carefully assess any accompanying fees.

Register on a crypto exchange

To get started, investors should create an account on a crypto exchange. New users typically need to pass the verification process by submitting an image of a photo ID to fulfill Know Your Customer (KYC) requirements.

Fund account and place an order

Before diving into crypto purchases, fund your account using options such as connecting a bank account or using debit or credit cards.

Afterward, new crypto traders can click the “Buy” button to place an order to buy BTC with euros or choose a preferred cryptocurrency trading pair.

2. How to buy cryptocurrencies in Italy with P2P

In Italy, individuals have the option to buy crypto through peer-to-peer (P2P) platforms, such as eToro, Binance and Bitpanda. P2P platforms are preferred by some investors due to their user-friendly interfaces and the ability to engage in social trading, allowing users to follow and copy the strategies of successful investors. 

However, it’s essential to be aware of the risks associated with P2P trading, including price volatility and potential scams. To purchase crypto for the first time on P2P platforms in Italy, users typically sign up, complete identity verification, deposit funds, and then navigate the platform to execute buy orders or copy the trades of experienced investors.

3. Buy crypto through Italian banks

Investors can buy Bitcoin and other cryptocurrencies in Italy through Italian banks, such as Unicredit and Banca Intesa Sanpaolo. While they do not directly execute crypto transactions, their modern banking platforms enable users to transfer funds seamlessly to trusted digital asset exchanges, providing a convenient avenue for crypto enthusiasts in Italy.

Furthermore, in December 2023, Conio, a cryptocurrency wallet company with partial ownership by Poste Italiane and Banca Generali, joined forces with Coinbase to introduce a diverse array of digital assets to Italian banks and financial institutions.

Is cryptocurrency taxable in Italy?

Cryptocurrency transactions in Italy come under the purview of taxation. Indeed, when dealing with gains, losses or various transaction types, individuals may incur liability for either capital gains tax or income tax on cryptocurrency activities.

However, not all crypto activities are subject to taxation. Certain transactions remain tax-free, such as purchasing crypto with euros, holding crypto and transferring crypto between personal wallets.

Nevertheless, there’s a catch: Some transactions lack clear tax guidance. The absence of explicit instructions doesn’t exempt individuals from taxation. Instead, it emphasizes the importance of interpreting and applying existing tax rules to crypto dealings.

Skipping the filing of cryptocurrency taxes in Italy is a risky move. Penalties await, either as a fixed sum or a percentage tied to the evaded tax, ranging from 120% to 240% of the unpaid tax amount.

Capital gains and income tax in Italy

As mentioned before, in Italy, crypto activities fall under either capital gains or income tax, depending on the nature of the transaction. Regarding capital gains tax in Italy, the 2023 budget announcement revealed a 26% tax rate on cryptocurrency gains exceeding 2,000 euros.

As for income tax in Italy, it comprises municipal, regional and national components. The national income tax, the lion’s share of the total tax, ranges from 14% to 43%, depending on annual income. 

Italy’s income tax system is decentralized, meaning regional and municipal income tax rates can vary across the country based on local financial considerations. Depending on the location of residence, regional taxes can range from around 1%–3%, whereas municipal taxes are often less than 1%.

Under the updated Italian crypto tax guidelines, losses exceeding 2,000 euros from cryptocurrency investments can be subtracted from profits. Moreover, these losses can be carried forward for up to five years. This provision offers an opportunity to implement a strategic approach known as crypto loss harvesting to reduce tax liabilities effectively from year to year.

When is the tax return filing deadline in Italy?

For individuals deriving income from employment or pensions, the key document is Form 730 (Modello 730), with the deadline for submission set for Sept. 30 of the subsequent year. In practical terms, the 2023 tax return must be completed and filed by Sept. 30, 2024.

For self-employed and non-Italian tax residents, the relevant form is Redditi PF. If you belong to this category and are utilizing the Redditi PF, it is essential to note that the submission deadline is Nov. 30 of the subsequent year.

Does Italy have Bitcoin ATMs? 

Indeed, Italy has embraced the digital currency revolution with Bitcoin ATMs sprinkled across various regions, allowing visitors to seamlessly convert cash into Bitcoin on the spot. 

The trend kicked off in 2014 with the installation of the first Bitcoin ATM, marking the beginning of Italy’s embrace of this innovative and accessible form of digital currency exchange.

How to safely store cryptocurrency in Italy

To safely store crypto, investors can move their digital assets outside exchanges for enhanced security, reducing the risk of potential hacks or system failures. Keeping funds on an exchange means losing control over keys and, in turn, surrendering control over coins.

Select a reputable wallet, such as a hardware or software wallet, for secure storage, which will offer added protection against potential exchange vulnerabilities. To transfer crypto safely from an exchange, initiate a withdrawal to a chosen external wallet. Ensure control over private keys. 

The future of cryptocurrency in Italy 

In 2024, Italy anticipates the implementation of MiCA, a regulatory framework set to bring clarity and stability to the cryptocurrency landscape. As a result, individuals involved in the crypto sphere can anticipate increased scrutiny and potential adjustments to their tax obligations, making it crucial for enthusiasts to stay informed and adapt to the evolving regulatory environment.

Additionally, Italy’s collaboration with the Bank of Korea is poised to advance in 2024, with a particular focus on interoperability in distributed ledger technology (DLT) transactions for the European Central Bank’s retail central bank digital currency (CBDC) trials, reflecting the country’s unique approach to CBDC development.

Written by Liza Savenko