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Italy has officially extended its transitional regime for crypto operators registered as Virtual Asset Service Providers (VASPs), reshaping the timeline for implementing the Markets in Crypto-Assets Regulation (MiCAR). This MiCAR extension is more than a procedural delay — it reveals implicit tensions and strategic recalibrations in adapting to a radically new European regulatory framework for crypto.
Why the Italy MiCAR Extension Matters
The MiCAR extension in Italy modifies key aspects of Legislative Decree No. 129 of 5 September 2024, which transposed Regulation (EU) 2023/1114 on crypto markets. The updated framework affects:
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The deadline for submitting authorisation applications under Article 62 MiCAR
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The duration of the transitional period
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A conditional exemption for corporate groups operating across EU member states
These amendments reflect Italy’s intention to manage the transition from a national crypto register to a full-fledged EU-wide regulatory system with both flexibility and foresight.
Italy’s Revised Crypto Regulatory Timeline
Under the original MiCAR Implementing Decree, entities already registered in the Italian VASP register maintained by OAM (Organismo Agenti e Mediatori) could continue operating until 30 December 2025, provided they submitted an application by 30 June 2025. Failure to do so would lead to automatic deregistration and cessation of activities with Italian clients.
The new MiCAR extension in Italy now shifts the application deadline to 30 December 2025, and extends the transitional operating period to 30 June 2026. This alignment gives crypto operators in Italy more time to meet MiCAR’s robust authorisation criteria, including:
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Enhanced internal governance
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Stronger compliance frameworks
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Improved IT and cybersecurity controls
Importantly, crypto companies belonging to international corporate groups can now operate in Italy without submitting a local application — as long as another group entity has applied in another EU country. This derogation raises critical questions about regulatory harmonisation and the risk of regulatory arbitrage across jurisdictions.
Crypto Compliance: A Breathing Space or a Warning Signal?
The MiCAR extension granted by Italy isn’t a loophole — it’s a calculated move to manage a complex regulatory transformation. It provides crucial time for both private and public stakeholders to adapt:
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Crypto operators, many of them startups or SMEs with limited legal and operational infrastructure, now have a more feasible path to compliance
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Regulatory authorities like Consob and the Bank of Italy are given more room to absorb their expanded supervisory roles under MiCAR
However, this controlled flexibility must not become a permanent grey zone. To preserve the integrity of MiCAR, this additional time must be used wisely:
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Consolidate compliance practices
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Avoid fragmented national interpretations
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Reinforce the credibility of the EU’s crypto regulatory landscape
Tensions Beneath the Surface
This MiCAR extension also exposes the institutional and legal friction at the heart of crypto regulation in Europe. Italy’s approach attempts to balance:
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The urgency of harmonisation under MiCAR, which aims to ensure consistent crypto asset regulation across the EU
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The realities of implementation, especially in a sector with limited regulatory maturity and rapid technological change
Allowing foreign group entities to operate in Italy without a local MiCAR application creates asymmetries. While it aligns with the principle of the EU passport, it could put Italian crypto firms at a competitive disadvantage and fuel concerns about inconsistent supervisory standards.
Looking Ahead: The Real Risk Is Misalignment, Not Delay
Italy’s MiCAR extension is not about avoiding regulation. It’s about phased adaptation — acknowledging that regulatory change must be both ambitious and attainable.
What’s now at stake is the quality of the transition. Will Italy use this breathing room to promote a strong, future-proofed crypto compliance culture? Or will delays invite confusion, divergence, or even exploitation?
To prevent the latter, regulators must:
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Actively engage with industry stakeholders
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Ensure transparency in enforcement
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Coordinate closely with other EU supervisory bodies
Conclusion: A Strategic Pause, Not a Step Back
The Italy MiCAR extension doesn’t compromise the EU’s long-term vision for a regulated crypto market — it reinforces it. By offering a controlled transition, Italy aims to ensure that the crypto sector evolves not only in line with MiCAR’s legal requirements but also with its spirit of market integrity, investor protection, and financial stability.
But this is no time for complacency. The MiCAR extension in Italy is a window of opportunity — for companies to gear up, for regulators to level up, and for the entire system to prepare for a new era in crypto regulation.
The question is no longer if MiCAR will be implemented, but how well — and how fairly — it will be applied.
Authors: Andrea Pantaleo and Giulio Napolitano