Banca d’Italia Enforces Comprehensive Sanctions Screening for Crypto Transactions

This directive reinforces the EU's commitment to preventing sanctions evasion through digital assets, affecting how crypto transactions are processed across Europe.

• On September 7, 2026, Banca d’Italia mandated that all crypto transactions be screened for EU sanctions compliance without minimum thresholds.
• This measure targets Italian-regulated payment and crypto-asset service providers to curb sanctions evasion, particularly related to Russian entities.
• The directive aligns with existing European Banking Authority guidelines, emphasizing transaction-by-transaction checks.

• Sanctions against Russia have been a focal point for the EU, with crypto increasingly used to circumvent these restrictions, as evidenced by the $110 billion processed by the A7A5 stablecoin.
• Banca d’Italia's communication builds on previous guidelines established in December 2025, which set the groundwork for mandatory screening practices.
• The directive explicitly prohibits minimum amount thresholds in automated systems, aiming to prevent structuring and ensure compliance across all transaction sizes.

On September 7, 2026, Banca d’Italia issued a pivotal communication that mandates comprehensive sanctions screening for all crypto transactions processed by Italian-regulated entities. This directive is a direct response to the growing concern over the use of cryptocurrencies for evading sanctions, particularly in light of ongoing geopolitical tensions involving Russia. The Italian central bank's move is not just a regulatory formality; it reflects a broader strategy to tighten the financial ecosystem against illicit activities.

The communication emphasizes that there will be no minimum thresholds for transaction amounts, which means every single crypto transfer must undergo scrutiny. This is a significant shift from previous practices where smaller transactions might have been exempt from rigorous checks. By eliminating these thresholds, Banca d’Italia aims to close loopholes that could allow for the structuring of transactions to evade detection. This approach aligns with the European Banking Authority's guidelines, which were already in effect and required similar screening measures.

Moreover, the directive clarifies that exceptions for instant payments do not apply to crypto transactions handled by crypto-asset service providers (CASPs). This means that even rapid transactions will be subject to the same stringent checks, ensuring that all parties involved in the transfer are compliant with EU sanctions. The implications of this are profound, as it places the onus on CASPs and payment service providers (PSPs) to implement robust compliance systems capable of handling these requirements.

The backdrop to this regulatory tightening is the alarming trend of crypto being used to facilitate sanctions evasion. Reports indicate that the Russian ruble-backed A7A5 stablecoin processed a staggering $110 billion in transactions between February 2025 and May 2026, despite ongoing Western sanctions. This statistic underscores the urgency of Banca d’Italia's directive and the need for stringent oversight in the crypto space.

As the EU continues to roll out sanctions packages targeting Russian entities, the pressure on financial institutions to comply with these measures will only increase. The Banca d’Italia communication serves as a reminder that the regulatory landscape is evolving rapidly, and entities operating in the crypto space must adapt to these changes or face significant penalties.

• Crypto-Asset Service Providers (CASPs): They will need to enhance compliance measures to meet the new screening requirements.
• Payment Service Providers (PSPs): Similar to CASPs, they must ensure all transactions are screened without exceptions.
• Businesses and Individuals in Italy: Those engaging in crypto transactions will face delays and potential complications due to increased scrutiny.
• Regulatory Compliance Teams: They will be tasked with implementing new systems and processes to ensure adherence to the updated regulations.

• Compliance Adaptations: Monitor how quickly CASPs and PSPs adapt their systems to meet the new requirements, as delays could lead to penalties.
• Market Reactions: Watch for any shifts in crypto transaction volumes in Italy as businesses adjust to the new compliance landscape.
• EU Sanctions Developments: Keep an eye on further EU sanctions packages, as these may influence the regulatory environment and compliance expectations.