Bank of Italy Warns of Systemic Crypto Risks, Concentration of Power Under Trump

The central bank of Italy has repeated long -term concerns about the growing influence of crypto on traditional financing, even if the largest commercial bank in the country accelerates its push in digital assets.

In his last Financial Stability ReportPublished Monday, the Bank of Italy, or Banca d’Italia, marked the rising worldwide integration of crypto as a potential threat to financial stability.

For years, central banks around the world have issued almost identical warnings about the systemic risks of Cryptos’s growing ties with traditional finances, stating volatility, regulatory holes and potential infection on markets.

Nevertheless, recent political developments have only alerted the major financial institutions, which indicate the shifting of wind in Washington, DC

In its report, the bank pointed to a strong rise in the prices of digital assets after the American election of Donald Trump and the crypto-friendly initiatives of his administration, warning that deeper entanglement between traditional finances and the volatile activa class could create systemic vulnerabilities.

“If these instruments were more closely intertwined with the traditional financial system, there could be greater vulnerabilities for markets and intermediaries,” said it.

Towards the end of March, the global crypto market was appreciated at $ 2.75 trillion. Bitcoin alone made up more than 60% of that figure, with 30% from other non -backed crypto assets.

Only 9% of the market consisted of stablecoins – digital assets bound by traditional currencies, most of which are linked to the US dollar.

The Trump effect

The US Pro-crypto-pivot Under President Trump, mainly renewed interest in digital assets has fired.

In recent months, supervisors in the US have taken a softer position on crypto and dropped several studies in crypto companies, while the Crypto events government has organized in the White House.

Increased ties between the government, traditional finances and crypto, especially in the US, are concerned about the Italian bank. The report was also aimed at ETFs and business treasury boxes that are increasingly holding Bitcoin to support stock prices.

It also warned of conflicts of interest, gaps for administration and the concentration of crypto power in some American companies.

“A significant part of Bitcoin is held by companies that are exclusively active in the digital assets sector (eg trade platforms), which are not subject to specific administrative requirements and can therefore have significant conflicts of interest,” said it.

It claimed that about 75% of these companies are located in the US, with others in China, Canada and the UK, and a negligible presence in the Euro area.

Stablecoin sovereignty

The bank also wrote about the disproportionate influence of dollar-supported stablecoins such as Tether’s USDT and Circle’s USDC. A widespread run on repayments, it noticed, could cause a fire sale of American government bonds and shake the world markets.

The bank warned that Euro Stablecoins issued by American companies could undermine the EU payment systems and threaten monetary sovereignty.

But while the central bank is careful, not all banks of the country are on board. Intesa Sanpaolo, the largest banking group in Italy, is Calm development His own crypto playbook.

In January the bank bought 11 Bitcoins worth around € 1 million ($ 1 million), which marked the first direct purchase of bitcoins by an Italian lender. It refused to explain his reasoning.

It also endorsed the first blockchain bond of Italy in July 2024 and added Spot Crypto trade to his own trade desk in November.

Even legislators are involved. In January, MP Marcello Coppo called Italian bank foundations to invest in Bitcoin.

Despite the official discomfort, the bank or Italy does not turn its back on the blockchain technology, even if it is careful with its financial value.

Last year, it announced A permitted consensus protocol that is designed to work with Bitcoin, add privacy functions for validators and push to a central bank -tight ledger.

Edited by Sebastian Sinclair