Italy has launched an “in-depth review” of retail investors’ exposure to crypto amid growing concerns over regulatory fragmentation and financial stability risks. This comes as the U.S. embraces crypto-friendly policies, and markets surge past $3 trillion.

The review aims to assess safeguards for both direct and indirect crypto investments by retail investors, highlighting Europe’s worries about oversight blind spots due to fragmented global rules.

Experts predict meaningful convergence by 2026 as the U.S. clarifies its regulatory path, creating economic pressure for others to align. Italy’s focus on crypto’s financial-stability impact marks a shift from treating it as a peripheral concern.

The Bank of Italy’s warning in April flagged crypto’s integration as a threat to financial stability, citing conflicts of interest and governance gaps. With roughly 75% of firms holding significant Bitcoin positions based in the U.S., vulnerabilities for markets and intermediaries increase.

Italy’s in-depth review is seen as a key escalation in Europe’s aggressive supervision over fintech and crypto. The EU’s push for tighter licensing and stricter AML guidance aims to provide regulatory certainty and easier EU-wide passporting for compliant firms.

Crypto providers in Europe will face rising compliance costs but gain a competitive edge with robust governance and investor safeguards. Mishra believes Europe will become the gold standard for crypto regulation, sidelining risky havens while serving retail users more safely.

Read more at Yahoo Finance: Italy Launches ‘In-Depth’ Review of Crypto Risks