(Finance) – The Bank of Italy has called attention of all entities operating in the crypto-asset markets and of current and potential users on relevant aspects concerning the EU Regulation on crypto-asset markets (MiCAR).
With reference to the protection of holders of electronic money tokens, Bankitalia highlights that the interested parties will have to ensure that potential holders are fully aware of both the potential risks connected with the technology used, both of the rights and obligations pertaining to them in relation to the specific token and in particular of the right to reimbursement at the nominal value and of the procedures and conditions for the exercise of such right.
In particular, alongside traditional financial risks, entities operating in crypto-asset markets will have to take adequate account of operational risk profiles inherent in the technology and relating to the functioning of the DLT infrastructures on which the tokens will be issued and transferred, to the implementation of smart contracts functional to the performance of the activities, to the custody of the private keys necessary for the movement of the assets owned or held on behalf of the customers.
In light of the novelty of the business models and the related technological complexity, supervised entities intending to carry out activities in the sector will have to have appropriate skills, including within the board of directors; ensure the full involvement of corporate bodies and control functions from the planning stage of new initiatives; adopt procedures to adequately identify, measure and mitigate all financial and operational risks, especially in the presence of business models that provide for the combination of multiple activities regulated by MiCAR (not only the combination of issuing and service provision activities, but also the offer of the same service for different types of tokens).
The supervised entities will also have to pay particular attention to the management of risks arising from high interconnection between supervised entities themselves and between these and specialized third partieseven those outside the scope of supervision. In this context, the choice and monitoring of the solutions adopted for the custody of digital assets, whose security is a fundamental condition for the correct functioning of the entire system, assume specific importance. In the event of outsourcing, it is essential that the entities operating in the crypto-asset markets conduct a thorough check of potential suppliers before proceeding to the stipulation of the relevant agreements, in order to ensure that the use of third parties does not prejudice the ability of the same entities to comply with the obligations incumbent on them.
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