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Italy
6.30 Rather Enabling Environment
Italy
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Few cryptocurrency and blockchain projects choose Italian jurisdiction today, and the country does not rank among the leaders of the crypto market.

The Bank of Italy in 2014 was the first among the Italian regulators to speak on the crypto industry, taking a negative position that is generally maintains today. In January 2015, a warning was issued informing consumers about the risks associated with the use of cryptocurrencies.
An important step in regulating the crypto industry was the Italian Tax Agency (Agenzia delle Entrate)issuing resolutions in September 2016 and September 2018 that explained the peculiarities of applying the general tax legislation to operations with cryptocurrencies and ICOs.

Italy has taken some measures to combat money laundering using cryptocurrencies. Legislative Decree No. 90 issued in May 2017 provides the definition of the term "virtual service provider" that covers exchanges and crypto wallets, as well as the term "virtual currency" covering cryptocurrencies.

In March 2019, the key financial regulator in the country, Commissione Nazionale per la Società e la Borsa (CONSOB), A call was released to start the discussion of ICOs and cryptocurrencies, while the document raised a number of questions aimed at determining the legal status of cryptocurrencies for their regulation in order to protect the interests of investors.
Neutral Political Environment
6.0 points
Major institutional political actors in Italy, with the exception of the President, take part in the discussion around the blockchain technology and the crypto industry. At the same time, the Government and the Parliament are rather concerned over the blockchain technology itself: the regulators emphasize its potential for innovation and stimulate its introduction in various spheres of economy and public administration. The Central Bank of Italy, on the contrary, pays more attention to cryptocurrencies and ICOs, taking an extremely negative attitude towards them. Banks and judicial system take a less active, but rather positive attitude towards the blockchain projects and cryptocurrencies.
Rather not Enabling Legal Environment
4.23 points
Regulatory Convergence
The regulation of blockchain projects and cryptocurrencies is the responsibility of Commissione Nazionale per la Società e la Borsa (CONSOB), Tax Agency (Agenzia Entrate), Ministry of Economic Development (Ministero dello sviluppo economico). There are no noticeable contradictions in the approaches of the various regulators, as well as discrepancies in the legal status of legal relations connected with the crypto industry.

Definiteness of Legal Regulation
Italy has no special legislation regulating the activities of blockchain projects and cryptocurrencies. However, there is regulation by analogy and soft instruments of regulatory bodies, while certain legal relations are regulated by special legislative acts. At the same time, part of the activities remain unresolved.

Regulation by analogy is carried out in accordance with the Consolidated Income Tax Act (1986) Legislative Decree No. 633 "Creation and Regulation of the Value-Added Tax" and Legislative Decree No. 231. The special legislation concerns AML and smart contracts that are regulated by Legislative Decree No. 90 "On the Implementation of EU Directive 2015/849 on Preventing the Use of the Financial System for Money Laundering and Terrorism Financing and to Amend EU Directive 2005/60 and Repeal EU Directive 1781/2006" and Amendments 8.0.3. to Senate Act No. 989, respectively.

Stability of Legal Regulation
The current discussions initiated by regulators suggest that the legislation applicable to blockchain projects and cryptocurrencies will change. There is no reason to say that regulators will take prohibitive measures.

Adequacy of Legal Regulation
In general, the legislation and the law enforcement practice are adequate. The development of blockchain projects is being actively stimulated, while cryptocurrency projects remain largely unregulated with their peculiarities not being taken into account in some cases.
Situation with the Rule of Law
Italy ranks 28th in the Rule of Law Index. The conditions of the legal regulation of blockchain and cryptocurrencies are neutral, and since the values of the sub-criterion of the rule of law are average (0.65), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are quite significant.
Enabling Infrastructure Environment
8.68 points
Italy has a well-developed telecommunications infrastructure. The country ranks 24th among 193 countries in the UN Global E-Government Development Index.

Italy ranks 51st in the WB's Doing Business rankings.