According to a report by Reuters, Italy is withdrawing its plans to increase taxes on cryptocurrency capital gains. Two months ago, the government had planned to raise taxes from 26% to 42% by the end of December.
Italy Cancels Planned Cryptocurrency Tax Hike
Italy has decided to cancel its planned cryptocurrency tax hike. Politicians from the coalition government announced that the decision was made in response to criticism from the sector and disagreements within the economy minister’s party. Giulio Centemero, a member of the League Party, and Deputy Minister of Finance Federico Freni stated during parliamentary sessions that the planned tax increase would be significantly reduced.
As part of the 2025 budget, the Treasury had planned to raise the tax on capital gains from cryptocurrencies from 26% to 42%. However, the League Party warned that such a move could encourage the informal economy. “Prejudices against cryptocurrencies must end,” said MPs Giulio and Freni, adding that the government may decide to keep the current 26% tax rate.
Italy and Cryptocurrency Regulations
This year, Italy transitioned to the MiCA regulations. The MiCA regulation mandates that crypto-asset service providers (CASPs) in EU member states must obtain licenses. On August 30, 2024, the Italian government accepted a draft decree to integrate MiCA into the country’s laws.
In 2019 and 2023, Italy introduced some laws concerning cryptocurrencies. However, these laws did not provide clear regulations. As of 2023, crypto-asset service providers were required to register under the OAM regulation. This ensures that the use or trade of cryptocurrencies is not illegal, but service providers must register with the OAM.
5 Key Things You Should Know About the Cryptocurrency Market This Week!
With MiCA, new opportunities are emerging for banks and other financial institutions to enter the crypto markets. However, the uncertainty brought about by the new regulations is expected to be cleared. MiCA allows specific financial institutions to provide crypto-related services through a simple notification procedure. This process will facilitate the entry of banks and financial institutions into Italy’s cryptocurrency market.
With the implementation of MiCA, the cryptocurrency market in Italy will become more regulated and transparent. According to a study conducted in July 2024, the proportion of people in Italy investing in cryptocurrencies has increased from 8% to 18%, showing that Italy’s interest in cryptocurrencies is growing. Additionally, it indicates that MiCA’s regulations offer a significant market opportunity.
Increased Trust with MiCA in Italy
MiCA will come into effect at the end of 2024. New crypto-asset service providers will now need to apply for licenses. As a result, more institutional participation is expected in Italy’s cryptocurrency market with the implementation of MiCA. MiCA offers new opportunities for banks and other financial institutions, and it will provide greater trust and transparency in the crypto-asset sector. As reported by Kriptokoin.com, the country began this year with new partnerships for tokenization.
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