Italy’s Central Bank Mandates Sanctions Screening for Crypto Transfers
Italy’s central bank, Banca d’Italia, has mandated compulsory sanctions screening for cryptocurrency transfers to combat illicit flows within the EU. The bank requires crypto asset service providers (CASPs) to implement policies and internal controls that detect and prevent transactions involving sanctioned individuals and entities, according to a statement released on Monday.
Banca d’Italia’s Requirements for Crypto Asset Service Providers
The regulator mandates that CASPs establish adequate controls to identify customers and transactions linked to sanctioned entities. These measures are designed to ensure compliance with EU financial sanctions when processing cryptocurrency transfers.
Banca d’Italia emphasizes the need for internal procedures and oversight to effectively prevent circumvention of sanctions via digital assets.
Cryptocurrencies Used Globally to Evade Sanctions
Cryptocurrency usage to bypass sanctions has become increasingly prevalent among countries like Russia and Iran.
According to CertiK, the Russian ruble-backed stablecoin A7A5 processed $110 billion in transactions from February 2025 to May 2026 despite Western sanctions.
Iran’s central bank has relaxed foreign currency controls to encourage businesses to use cryptocurrencies such as USDT and Bitcoin for cross-border settlements through Iranian exchanges.
In July 2026, US Treasury Secretary announced the freezing of over $130 million in crypto wallets linked to Iran’s central bank, while TRM Labs reported $3.8 billion in flows between crypto exchange CoinEx and sanctioned Iranian entities over seven years.
Why it matters
The mandatory sanctions screening on cryptocurrency transfers introduced by Banca d’Italia highlights regulators’ increasing concern over the rising use of digital assets to evade international sanctions. This measure aims to strengthen oversight and transparency in crypto transactions, preventing the misuse of emerging technologies for illicit financing and enhancing financial security and compliance with international law within Europe.
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