Italy’s central bank, Banca d’Italia, has ordered crypto-asset service providers (CASPs) to implement mandatory controls screening cryptocurrency transfers for connections to sanctioned entities.

Under the measures, CASPs must establish policies and internal controls to enforce European Union (EU) financial sanctions when processing crypto transfers, Banca d’Italia said in an announcement. The central bank said providers must maintain adequate controls to identify customers and transactions connected to sanctioned entities.

The directive states that checks must be conducted:

i) on their own customers, at the time the relationship is established and when specific events occur (e.g., when a new EU Council regulation providing for new restrictive measures is adopted or in the event of changes to personal data);

ii) on individual transfers of funds and crypto-assets, before executing the transaction, with regard to both the name of the originator and that of the beneficiary.

The directive also says that payment service providers (PSPs) and CASPs are always required to check the data of the originator and beneficiary for transfers of funds or crypto-assets. This places the screening obligation at both the customer-relationship stage and the individual-transaction stage, with checks required before a transfer is executed.

The move comes amid reported use of cryptocurrencies by entities in Russia and Iran to conduct transactions despite financial sanctions. The Russian ruble-backed A7A5 stablecoin processed about $110 billion in cumulative transactions between February 2025 and May 2026 despite being targeted by Western sanctions, according to blockchain security firm CertiK.

Iran has also reportedly eased foreign-currency controls to encourage businesses to use cryptocurrencies, including USDT and Bitcoin, for cross-border settlements through Iranian exchanges.

In July 2026, U.S. Treasury Secretary Scott Bessent said U.S. authorities had ordered the freezing of more than $130 million in cryptocurrency held in wallets linked to Iran’s central bank. Blockchain analytics firm TRM Labs reported in June 2026 that more than $3.8 billion had flowed between the crypto exchange CoinEx and sanctioned Iranian entities over a period of more than seven years.

The measures add to the regulatory requirements facing crypto businesses operating in Europe. BitcoinKE previously reported that Banca Sella became the first Italian bank to offer crypto services in the country. The original report was published by BitcoinKE.