Crypto-assets

The first major example of cryptocurrencies - or, more precisely, crypto-assets - was Bitcoin, launched in 2009. Many others have followed since then. Although they were originally created to replace traditional money, they are still used mainly as highly risky speculative instruments.

Let's take a closer look.

What crypto-assets are

Crypto-assets are digital representations of a value or a right, such as a sum of euros or dollars, a financial instrument (like a share), or ownership of a piece of art. They rely on cryptographic techniques - mathematical methods used to protect data and transactions to ensure they are secure and verifiable.

Being digital, crypto-assets do not exist physically: they can only be held in electronic wallets and are transferred from one person to another using even very complex technologies, such as blockchain. They can be issued by anyone, including unidentified individuals, but also by banks and other intermediaries.

Unlike official currencies such as the euro or the dollar, crypto-assets are not legal tender, that is money that the law requires people to accept as payment. They are not issued or guaranteed by a central bank or any other public authority, and they are not always able to perform all the main functions of money: a medium of exchange, a store of value, and a unit of account.

For example, paying with Bitcoin:

• is expensive because of transaction fees;
• is only rarely possible, as many people do not accept it as payment;
• is not immediate: for a payment to be considered secure, it may take over an hour;
• is risky: its value fluctuates sharply over time, meaning that the price of a good or service can vary significantly for both payer and recipient.

For these reasons, it is more accurate to call them crypto-assets rather than cryptocurrencies.

Not all crypto-assets are the same

The world of crypto‑assets is varied and complex.

Non‑fungible crypto‑assets have unique characteristics or represent specific goods, such as a digital artwork, a property, or a patent. These are known as NFTs (non‑fungible tokens).

Fungible crypto‑assets, like Bitcoin, are all identical and therefore interchangeable, similar to two banknotes of the same denomination or two ordinary shares of the same company.

Among fungible crypto‑assets, we can distinguish between those whose value fluctuates freely over time, such as Bitcoin or Ether, and those - called stablecoins - that aim to maintain a stable value by being linked to underlying assets such as the dollar, the euro, or other financial or non‑financial assets like precious metals.

Although their role in payments is growing, stablecoins are still mostly used to exchange other crypto‑assets, acting as a bridge between the real and virtual worlds, and to hold strong currencies like the dollar in high‑inflation countries.

Risks to be aware of

Buying crypto-assets exposes you to varying degrees of risk depending on the type.

For crypto-assets not backed by any entity or underlying financial or real assets, such as Bitcoin or Ether, the risk is very high: sharp declines alternate with periods of strong increases, with wide price swings.

For stablecoins, the risk depends on:

• the actual availability of the underlying assets;
• the quality of the underlying assets;
• the effectiveness of the stabilization algorithm.

In other words, some stablecoins are more risky than others.

For example, for stablecoins pegged "one-to-one" to legal‑tender currencies such as the euro or the dollar, the risk of loss is lower than for other crypto‑assets, but it is still present. In return, the potential gain is virtually zero.

Stablecoins linked to assets such as gold or silver, or to other crypto‑assets, carry higher risk (and higher potential gains).

Investing in crypto-assets also exposes you to losses caused by technical failures, theft, mistakes in storage or transfer, scams, or fraud - particularly when using unofficial channels. Examples include losing access credentials or having crypto-assets stolen through cyberattacks on devices or wallets.

A wallet is the virtual storage where crypto-assets are held. It may be:

• hot, when crypto-assets are stored in devices, e.g., computers, smartphones, cloud services, connected to the internet;
• cold, when stored on devices not connected to the internet such as an external hard drive.

The owner of a crypto-asset does not necessarily have to own the wallet where it is stored. Many intermediaries now offer custody services.

Before investing, carefully consider the characteristics of the crypto-asset and your risk tolerance.

How individuals who purchase crypto-assets are protected in the European Union

The MiCAR Regulation has been fully in force in the EU since early 2025. It governs the issuance, public offering, and provision of services for certain types of crypto‑assets.

The new rules first introduce a transparency requirement: anyone offering crypto-assets to the public in the EU must prepare a "white paper" clearly and transparently describing their risks and main features.

This helps us understand what we are actually buying.

For those wanting to issue stablecoins in the EU, stricter rules apply:

• Asset‑Reference Tokens (ARTs) - stablecoins linked to one or more official currencies and/or specific financial instruments, like government securities - may be issued only by banks and specially authorized entities. Issuers are supervised and must guarantee that buyers can redeem them at the market value of the underlying assets at any time. Their performance and associated level of risk depend on the mix of underlying assets. An ART linked to a short term government security is much less risky that an ART linked to gold.

For example, if we spend 100 euros to purchase 100 ARTs, we do not have the right to carry out the opposite transaction under the same conditions: when converting the ART back into euros, we may receive a higher or lower amount depending on the value of the reserve assets at the time of the conversion.

• Electronic Money Tokens (EMTs) - stablecoins linked "one‑to‑one" to a single official currency - may only be issued by authorized banks or electronic money institutions. They must be redeemable at face value at all times, making them low‑risk substitutes for money, though they offer no returns.

For example, if we spend 100 euros to purchase 100 EMTs, we always have the possibility to carry out the opposite transaction, that is, to receive 100 euros by returning 100 EMTs.

MiCAR also defines Crypto‑Asset Service Providers (CASPs), i.e., the platforms and operators authorized to offer services such as trading, custody, advice, order transmission, or placement of crypto‑assets. CASPs allow the buying, selling, or safekeeping of crypto-assets within the European Union in compliance with the limits established by the regulation.

How individuals who purchase crypto-assets are protected in the in the United States

In July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoin Act (Genius Act) was approved in the United States, the first federal law to provide an organic regulatory framework for stablecoins that aim to maintain a stable value relative to the dollar. This is an important milestone, given that the vast majority of stablecoins are pegged to the dollar.

The Genius Act provides that only authorized and supervised entities, such as banks, may issue this type of stablecoin. These issuers must comply with strict requirements regarding capital soundness and transparency: every token in circulation must be backed by liquid reserves maintained on a one‑to‑one basis with the value of the stablecoins issued, consisting exclusively of monetary reserves or short‑term U.S. Treasury securities. The reserves may not be reused for other operations and must be verified by independent auditors; moreover, issuers are required to publish detailed information on the composition of the reserves on a regular basis and to guarantee immediate redemption at face value.

Some advice if we are keen on entering the crypto world

If you have decided to purchase crypto-assets, the first piece of advice is to use only official channels and to deal exclusively with operators authorized by national authorities - in Italy, Consob and Banca d'Italia. This allows us to benefit from the protections offered by the regulations.

The second piece of advice concerns the type of crypto-asset:

• if you are interested in using crypto-assets as payment instruments, consider only stablecoins that are linked "one to one" to a single official currency, which in the European Union may be issued solely by authorized banks and electronic money institutions;
• if instead you wish to purchase the riskier types of crypto-assets - such as Bitcoin - bear in mind that the regulations do not provide any protection against the risk of losing what we invest. These crypto-assets are essentially a high‑risk gamble, whose value is not based on profits, sales prospects, repayment capacity, or guarantees, but changes solely according to what people are willing to pay for them at any given time. For these types of crypto-assets, it is advisable not to invest more than we are prepared to lose.

The third piece of advice, which applies broadly to everything, is to remember that no one is willing to give us money for free. Therefore, any promise of high returns at low risk is very likely a scam. You should be wary of anyone promising quick and easy gains or urging you to act hastily with "limited‑time" offers. You must not trust requests for payment, nor anyone asking you to share private keys or codes. It is always wise to avoid clicking on links or downloading apps from unknown sources and to verify that the website or platform is genuine, with verifiable contact details and correct web addresses. A little extra caution can prevent substantial losses and help protect our savings.