Banca d'Italia tightens crypto checks for sanctions

TLDR

Banca dItalia has ordered banks and crypto providers in Italy to screen every transaction for EU sanctions compliance, with no minimum amount exemptions.

1. Italys central bank now requires payment and crypto asset service providers to check both sender and recipient of all transfers against EU sanctions lists, following stricter EU rules on Russian exposure.
2. The order bans small amount thresholds in automated systems, meaning even low value crypto and fiat transfers can be delayed or blocked if screening flags possible sanctions issues.
3. This move signals a tougher EU stance on crypto in sanctions enforcement, and similar zero threshold screening could spread, raising compliance costs and operational friction across the bloc.

Deep Dive

1. What Italy Has Ordered

According to Banca dItalias communication on 10 Sep, payment service providers and crypto asset service providers must screen every transaction for EU sanctions, with no minimum amount thresholds allowed in compliance systems. The checks must verify both originator and beneficiary names against EU designated lists and follow travel rule procedures for customer identification. The stated aim is to prevent sanctioned actors, particularly Russian entities and a Russian ruble linked stablecoin, from evading restrictions by splitting funds into many small transfers, a tactic known as structuring.

2. Practical Impact On Crypto Activity

Crypto firms operating in or through Italy need robust sanctions screening and travel rule tooling, including for low value payments, which increases compliance costs and complexity. Automated systems must be tuned to avoid overwhelming false positives, but cannot exclude small transfers from checks, so users may see more delays or occasional freezes while alerts are reviewed. High risk patterns, such as links to Russia or previously flagged addresses, will be more likely to trigger blocks, pushing some flows to less regulated venues or on chain routes that avoid EU regulated intermediaries.

3. Signals From The EU And What To Watch

This order fits a broader EU trend of treating crypto as part of the sanctions enforcement toolkit, not a separate niche, and closing gaps where digital assets could sidestep restrictions. If Italys zero threshold model is seen as effective, other EU supervisors could adopt similar guidance, tightening standards for all CASPs serving the bloc. Key things to watch are how Italian and EU regulators enforce misconfigured systems, whether other central banks issue parallel orders, and whether exchanges or stablecoin issuers publicly adjust geofencing and controls in response.

Conclusion

Banca dItalias decision moves crypto screening closer to full spectrum surveillance of sanctioned risks, treating every transfer as a potential enforcement touchpoint. For crypto users and providers in Europe, the direction of travel is clear: stronger sanctions controls, more granular screening, and a higher premium on compliance ready infrastructure.