The Bank of Italy requires domestic crypto asset service providers to perform sanctions screening for every crypto transfer, regardless of the amount, and no minimum transaction threshold should be set to bypass automatic matching.

The central bank explicitly requires that the screening covers information on both the sender and receiver of each transaction, and verification must be completed before executing the transfer. This requirement targets the configuration of automated control systems, rather than requiring compliance personnel to manually review all small transactions; the system can still first compare customers and transaction information against the sanctions list, and only enter manual review if a suspected match occurs.

The related obligations are not new sanctions rules but are aimed at implementing the European Banking Authority's internal policies, procedures, and control guidelines for executing restrictive measures of the EU and its member states. The Bank of Italy has incorporated this into its national regulatory framework through Document No. 52 dated May 19, 2025, which will be applicable in Italy starting December 30, 2025.

Exemptions available to payment service providers for instant payments do not apply to crypto asset service providers handling crypto transfers. Crypto companies must check their screening systems, the frequency of sanctions list updates, and the alert handling process to ensure controls cover all applicable transactions.

The MiCA authorization cannot replace the independent obligations under the EU's restrictive measures rules. With the removal of the amount threshold, institutions find it harder to rely on simplified screening rules and must enhance the coverage of automatic matching, the timeliness of list updates, and the ability to handle false positives to prevent large sums from being split into multiple small transfers to evade controls.

From a market mechanism perspective, this is driven by regulation rather than transactions: compliance system providers, list data, and alert handling services will see increased demand, while small and medium-sized crypto service providers will face pressure from system upgrades and false positive handling costs. Large licensed institutions will benefit relatively due to their existing risk control infrastructure, making it more likely that funds will concentrate in licensed channels that have completed screening calibration.

Italy has ended the MiCA transition period, and the number of authorized crypto service providers domestically is limited. Regulatory communication focuses on whether systems are configured according to existing guidelines, rather than legislating to raise legal thresholds.

Source: Public Information