Banca d’Italia Tightens Crypto Screening to Enforce EU Sanctions

Banca d’Italia has instructed payment service providers (PSPs) and crypto asset service providers (CASPs) to apply comprehensive screening to every crypto‑related transaction, aiming to prevent evasion of European Union sanctions.

No Minimum Thresholds for Screening

The central bank emphasized that screening must be performed regardless of transaction size. Systems used by intermediaries must not include minimum‑amount thresholds that could allow transfers to bypass checks.

Travel‑Rule Compliance

Providers are required to verify the originator and beneficiary details of each transaction against the EU sanctions list, in line with the Travel Rule. Checks must be conducted when a customer relationship is established, when the EU Council mandates it, and for every subsequent transaction.

Balancing Accuracy and False Positives

Banca d’Italia advised that automated screening tools should be calibrated to limit false positives while ensuring that designated individuals and entities are identified.

Focus on Russian Sanctions

The tightened measures come as the EU’s latest sanctions package targets Russian actors, including the use of crypto assets to circumvent restrictions. The bank indicated that increased vigilance may lead to slower transaction processing.