The Italian Central Bank requires domestic crypto asset service providers to conduct sanctions screenings on the information of payers and recipients before executing customer transfers, and they must not skip these checks due to small transaction amounts. This statement is not the introduction of new regulations, but rather a reiteration that existing European requirements are already in effect in Italy.

No minimum screening threshold shall be set.

According to a notice issued by the Italian Central Bank on September 7, crypto asset service providers ( CASPs ) are required to confirm that their internal screening systems do not have a minimum transaction amount threshold. Whether it is a transfer of 1 euro or a larger amount, it should go through the sanctions screening process.

This requirement is aimed at automated control settings, and it is not intended for compliance officers to manually review each small transaction one by one. Institutions can still use automated systems to compare customer and transaction information with sanction lists; if a potential match is detected, further investigation will be conducted.

One reason for removing the amount threshold is to prevent sanctioned entities from splitting large transfers into multiple small transactions in order to evade system screening.

Relevant obligations came into effect at the end of last year.

The Bank of Italy stated that the relevant basic obligations stem from the internal policies and control guidelines of the European Banking Authority ( EBA ) regarding the implementation of restrictive measures by the EU and its member states. These guidelines were incorporated into Italy's regulatory framework through Document No. 52 dated May 19, 2025, issued by the Bank of Italy, and have been in effect since December 30, 2025.

Therefore, this communication in September is more of a regulatory reminder than the introduction of new legal requirements. The focus of regulation is on whether relevant institutions have configured and calibrated their existing screening systems as required.

The Italian Central Bank also emphasized that obtaining MiCA authorization does not mean that it can replace compliance obligations with sanctions. MiCA mainly relates to licensing, governance, and operational requirements, while EU restrictive measures still need to be implemented separately.

Instant payment exceptions do not apply to encrypted transfers.

European regulations have different screening methods for certain instant credit transfers. Due to the faster settlement speeds, some payment service providers can switch to screening all customers at least once a day and update the checks when the new restrictive measures come into effect.

However, the Bank of Italy has made it clear in a 2025 document that this exception does not apply to encrypted transactions processed by CASPs. Even though blockchain transaction confirmations are relatively fast, encryption service providers still need to complete the required information screening before execution.

In addition to screening against sanction lists, relevant institutions are also required to comply with EBA's separate guidelines regarding Travel Rule to address issues where the payer and payee information in transfers is missing or incomplete.

Cryptography service providers face pressure from system reviews

This reminder means that Italian cryptocurrency service providers need to quickly check whether the existing sanctions controls cover all transaction amounts, and at the same time confirm whether the frequency of sanctions list updates, the alert handling process, and the record-keeping procedures are in place.

In addition to name matching, identifying addresses on the blockchain is also a challenge. Relying solely on name screening may not be sufficient to identify associations between addresses and sanctioned entities, related intermediaries, or restricted services.

Therefore, some institutions may need to combine customer screening with on-chain analysis. However, the results of on-chain analysis still require human judgment, as the ownership of addresses can change, and some transactions may only be indirectly related.

The Italian Central Bank did not announce a new deadline for rectification this time, nor did it identify specific subjects of investigation or cases of punishment. For local crypto operators, the more practical next step is to create written review records to ensure that system settings, coverage of the list, and upgrade procedures can cover every transaction.