Italian Local Bank Unicredit to Ban Accounts Trading Bitcoin

Italian banking giant UniCredit has threatened to close the accounts of customers that are linked to crypto trading. According to the bank, their policies prohibit them from interacting with “counterparties issuing virtual currencies or acting as exchange platforms.”

UniCredit, the only systemically important bank in Italy, has revealed that it is in no way in support of cryptocurrencies. The revelation came after a customer raised concern that the bank had threatened to close his account over wire transfers to two cryptocurrency exchanges, Crypto.com and FTX.

The customer asked if it was stated in the bank’s policy that they could close his account for trading crypto. In response, UniCredit stated:

Hello, the current Group policies prohibit relations with counterparties issuing virtual currencies or acting as exchange platforms.

The stance is not so surprising as the Italian banking sector considers crypto to be an unregulated technology and has issued warnings to crypto investors. However, the Italian government has been making several moves to increase the adoption of the crypto industry in the country.

The new development could be harmful for Bitcoin traders and investors in the country as national bans tend to disrupt market activities, by increasing fear and anxiety amongst key players.

In contrast to UniCredit’s stance, some other Italian banks have been integrating crypto. Just last week, Banca Generali, a leading Italian private banking and wealth management bank with over $87 billion in assets under management, announced that it will integrate Bitcoin trading services for its over 300,000 clients. The bank will partner with Coino, a Bitcoin wallet/exchange app. The partnership which was initiated in 2020 will allow the bank’s clients to be able to buy Bitcoin simply by funding their bank account. They will also be provided with Bitcoin custody services.

Riccardo Renna, the chief  operations officer at the firm, said that the bank considers blockchain technology to be the future of finance.

We know that the future structure of the financial markets will certainly be influenced by the blockchain technology that continues to make its way. We are working with Conio at various tables to study possible adaptations of the blockchain to our processes and systems.

Crypto adoption in Italy: a series of turbulent events.

The highly contrasting stances on cryptocurrencies by the two banks is an offshoot of the regulatory uncertainty of the industry in the European country. While there is no prohibition on cryptocurrency trading in the country, the two major financial watchdogs including the Bank of Italy and securities regulator CONSOB, have through the years issued stern warnings to banks on trading crypto.

Crypto is equally not regulated for tax purposes in Italy. Till date, Agenzia Delle Entrate, the Italian tax authority, has not fully addressed the taxation of the asset class, although it has tried to apply existing tax regimes to them.

This uncertainty has affected crypto exchanges in the country. A case in point is cryptocurrency exchange Binance which was declared to be operating without authorization in Italy last year by CONSOB.