The draft of 2023 budget law finally fills the regulatory gap on cryptocurrencies or “crypto-assets”; the new and more organic regulations concern the treatment of digital assets in different aspects, irpef, the application of the relevant substitute tax also by non-financial operators, stamp duty, ivafe and tax monitoring.

We talked about it with Edoardo Belli Contarini, Partner – Fantozzi & Associati, and Raffaello Fossati, Associate Partner – Fantozzi & Associati.

Why is the role of tax rules critical in the crypto world?

As for all financial instruments, taxation affects the net income of investors thus playing a crucial role in the choice of the asset allocation. In recent years, cryptocurrency price fluctuations attracted the attention of investors but the uncertainty over the tax treatment of capital gains and losses in various countries, among which is also Italy, together with the lack of proper regulation of the industry may have discouraged the more prudent investors.  For instance, in 2016 the Italian tax authorities affirmed that cryptocurrencies should be assimilated to standard foreign currencies with the effect of taxing the related trading only when certain circumstances were met. In addition, cryptocurrencies maintained abroad (also via exchanges) should have been disclosed in the tax return for monitoring purposes. Such an approach was not totally consistent with the legal definition of digital currency (see art. 1 legislative decree no. 231/2007 and art. 1 legislative decree no. 184/2021), according to which blockchain currencies are not at all similar to fiat currencies.

Which are the changes introduced by the 2023 Budget Law?

With the 2023 Budget Law, the Italian legislator finally fills the regulatory gap on cryptocurrencies with a more organic discipline covering personal and corporate income taxes, stamp duty, so called “IVAFE” and tax monitoring. In particular, the Budget Law adds a specific type of income related to the sale for consideration, exchange, refund or holding of crypto-assets, exceeding 2,000 euros in each tax period. In addition, it provides for the franking of crypto assets with reference to market value as of 1^st January 2023, subject to the payment of a 14% substitute tax and regularization of the taxpayers’ position for previous years. In such respect, the regularization allows taxpayers to remedy the obligations due up to 31^st December 2021 by means of amended tax returns and payment of a substitute tax for past income, corresponding to 3.5% of the value of the assets disclosed, as well as a penalty reduced to 0.5% of the same value for failure to indicate crypto activities in the tax return. On the opposite, the Budget Law introduced the possibility to carry forward (over a 4-year period) and offset any losses incurred.

How do you think this will impact the crypto world this year?

Despite some technical aspects that may undermine the benefits provided by the new discipline (e.g., criminal penalties may apply), the clarifications provided together with the possibility to have certainty on the past should be welcomed by the investors. They shall carefully evaluate the opportunity to disclose their crypto assets and consider the corresponding value as of 1^st January 2023 in light of recent reductions in market prices. In case the franking of assets is deemed to be beneficial, the payment of the 14% substitute tax should be performed by 30^th June 2023 (wholly or first instalment).

Considering the downward trend in cryptocurrency prices occurred in 2022, the cost of the substitute tax can be considered as appealing to the investors that are not able to provide evidence of their purchase prices or in case their purchase prices were very low, especially if they are considering the possibility of disinvestment in the near future.

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Lexia Avvocati is an independent law firm with extensive knowledge and experience in fintech, blockchain technology and Decentralized Finance (DeFi) dynamics. The firm supports Italian and foreign clients, such as banks, funds, exchange platforms, wallet providers and digital asset providers, in the launch and management of their operations in Italy and in dealing with the relevant regulatory authorities. Thanks to its multidisciplinary team, Lexia advises in relation to all issues affecting companies operating in the sector, starting from corporate, tax and regulatory issues to the fields of personal data protection, cybersecurity, intellectual property and consumer protection. We talked about it with Angelo Messore, partner at Lexia, and Francesco Dagnino, managing partner and founder.

What do you believe are the most important challenges to date from a legal perspective that the Fintech world is facing?

One of the main challenges for fintech projects is definitely the absence of a clear legal framework. Indeed, it is well known that technology develops faster than the law. But if the law does not provide a transparent environment for innovation, there cannot be a level playing field between innovative projects and market incumbents (or between domestic players and foreign competitors). An example can be seen in the recent EU regulation on crowdfunding, which Italy has not yet implemented. We know of a number of Italian crowdfunding platforms that are waiting for the Italian state to publish implementing regulations in order to become fully operational on a European scale. In these cases, the lack of a well-defined regulatory environment creates a clear competitive disadvantage for fintech companies.

Are there any major new developments in Europe that those operating in the fintech sector need to be aware of?

European institutions are often criticized for their overly conservative approach to regulating fintech entities compared to other countries. Indeed, they try to strike a balance between consumer and investor protection on the one hand and openness to technology and financial innovation on the other hand – a task certainly not easy to accomplish.
In recent years, the EU has taken several steps to stimulate innovation in the financial market, notably through the Fintech Action Plan and the Digital Finance Package. In this context, a key role in shaping the rules for Fintech operators will be played by the recently approved EU regulation on the “pilot regime” for tokenized financial instruments and the EU regulation on cryptocurrency markets. Other initiatives that Fintech operators should keep an eye on include the ongoing review of the EU anti-money laundering framework, the entry into force of the EU regulation on crowdfunding, the proposed legislation to create a legal framework for the use of artificial intelligence, and the current discussion on the regulation of buy-now-pay-later (BNPL) services.

When you work along with an emerging fintech company, what are the most frequent issues you face and how do you support it?

The crucial challenge we meet with our clients is to bridge the gap between the business idea they have and its implementation in accordance with the current regulatory framework. When working on Fintech projects, there are many technical, operational, business, financial, marketing, and legal issues. However, sometimes Fintech companies decide to postpone legal analysis by focusing on the other aspects of their project. In doing so, they underestimate the importance of the legal framework for defining their business model.
As legal advisors, we must first understand the innovative sector in which the client operates and its business model in order to design the best legal solution. Fintech companies operate in a highly regulated environment and must be aware of all the legal complexities of the sector in which they operate, as well as the opportunities that the regulatory framework offers them. We support founders in defining and structuring their business idea taking into account all relevant legal constraints, as well as in approaching regulators to identify the appropriate legal framework for their project.

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This agreement reinforces a 5-year partnership and confirms Société Générale and Mastercard determination to support the rapid growth of Treezor as a European BaaS company. Being already a Principal Member of Mastercard, Treezor has onboarded some of the most disruptive fintech and both Mastercard and Treezor have supported the development of successful new players including Swile, Lydia, Qonto, Shine, and Pixpay.

As part of the agreement, Mastercard has made a minority investment in Treezor, which will help provide additional support through improved services, communication means, multi-rail payment infrastructure, and sales support from Mastercard’s local teams to improve Treezor’s success with fintech and corporates across Europe.

Mastercard’s technology, expertise, local teams, and support programs for fintech will accelerate Treezor’s European development across Benelux, Germany, Italy and Spain. Treezor will have priority access to new Mastercard products such as credit services, Open Banking, and the carbon calculator as well as the fully digital experience card programme ‘Mastercard Digital First’.

According to the Country Manager of Mastercard France, Mastercard has supported the BaaS player in the development of its product range and in its international expansion since Treezor inception. Mastercard has also accelerated Treezor’s neobanks onboarding via the Fintech Express programme, which Treezor has joined since July 2020. Mastercard has been a factor in accelerating the European expansion of Treezor, which is authorised to operate in 25 countries as an Electronic Money Institution and is regulated by the ACPR (French Prudential Supervisory Authority).

Société Générale group acquired Treezor in 2019 and has provided it with the expertise of a major international banking group in order to also satisfy the company’s financial needs and the shareholder stability that it needs to develop. Treezor also leverages Société Générale group to implement new payment services via API (e.g. Instant Payments, insurance, credit services) for regulated institutions and large corporates.

Congratulations to Treezor on this great news, which confirms the growth of our corporate network and proves once again that collaboration between different players can ensure growth for the whole ecosystem internationally.

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Risolvi il tuo Debito is a company that addresses a specific target group of people who want to but are no longer able to pay their debts. Therefore, agreements with the relevant credit institutions lapse. 

Risolvi intervenes by getting to know each customer and his situation individually. 

Using Machine Learning and Big Data tools, it develops a savings programme that will get customers out of over-indebtedness. 

At the same time, while clients are following the programme, Risolvi il tuo Debito contacts their respective creditors and, through their versatile tools, they reach agreements that satisfy both parties.

The first operation was set up in Mexico in 2009 in the wake of the 2008 economic crisis, that affected much of the global economy. They stepped in to help people who were over-indebted and realised that these people were not only over-indebted because of the crisis, but also because of bad economic education.  

This system has so far led Risolvi il tuo Debito to 400,000 clients worldwide and to resolving 300,000 debts. 

How is the company growing nowadays?

We talked about it with Piero Pietropinto, Consulting Team leader at Risolvi il Tuo Debito.

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Cybersecurity specialization is its strength, as well as the skills and expertise that allowed the company  to have a strong presence on both the Italian and International scene since 2008, with offices in Vilnius and Dubai. We are talking about HWG, founded in 2008 in Verona and offering medium and large-sized companies IT security services. 

Their core is the Security Operation Centre and their mission is to protect companies and take charge of the management and prevention of cyber incidents. 

Their motto? “Focus on growing your business, while we secure your critical system”.

Their first distinctive points is the specialization: they are not a generalist partner, but they specialize in cyber security. 

Another key element is the technical-consulting aspect: they want to position themselves as an extension of their clients’ IT security team to take charge of day-to-day activities, but also the development of the strategy, the governance and the processes needed to improve companies’ security. 

They are able to combine technical management and consultative elements in order to maintain the hard core of day-to-day operations –  such as incident management, 24-hour monitoring, and technology configuration and maintenance – but also to offer support from the perspective of governance processes and strategy development. By doing so, they can help all the stakeholders to spread the importance of security in their company, while also making it a key element in risk assessment from a business development perspective. 

What are the most relevant areas of cyber risk in relation to fintech? How is HWG managing to combine strategies and services truly dedicated to the fintech world?

We talked about it with Stefano Brusaferro, sales and marketing director at HWG.

Watch the full interview

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“Open Innovation is a winning and existential choice for companies, because it is impossible to lock knowledge inside the company in a global world with the Internet. If you lock knowledge inside a company, you struggle to innovate because you always start from limited cultural cues by definition, only internal cues.”

Andrea Ciliberti, CEO at Bcode.

Bcode is a Blockchain System Management software, specializing in notarizing data on blockchain, creating and managing tokens, and integrating blockchain solutions into business processes. As a spin-off of Politecnico di Milano, Bcode has created the first ready-to-use and easy-to-use platform that allows companies and freelancers to build and launch their own project on blockchain by notorizing data and creating tokens without having to hire a team of developers.

Its team consists of developers and software engineers who all have past experience in blockchain and come from consulting and project development in the blockchain field.

If you think that is not enough, the team includes professors and researchers as well and they have a strong business and marketing background in order to deeply understand market demands and turn those demands into easy-to-use products and solutions.

The company was born in late 2020, in 2021 it ended the first year with a balanced budget and in 2022 Bcode is basically doubling its revenue.

What is the secret? Open Innovation, of course.

Collaboration with technology companies through sales channels is the primary driver behind Bcode’s growth. They definitely understand that Open Innovation is not a fad, but a winning strategy and it’s existential for companies nowadays.

Let’s find out how they do that!

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Imagine for a moment that you are the manager of an airline. You are facing stark competition and you would like to strengthen your customer loyalty. If you could offer your customers, say, a debit card, you could award them loyalty points whenever they pay with their card. Then, each time your customers use their card, they would interact with your brand. By analyzing your customers’ spending behavior, you could understand them better and offer them more tailored services.

What about if you could offer your customers an online loan for their flight tickets directly on your website? This way, your customers could finance their journeywithout ever having to interrupt their experience with your app. You could increase the number of flight tickets you sell and directly influence the amount your customers spend. A loan also represents a much closer customer relationship with far more touchpoints than just a single sale.

These are just some of the benefits that Banking-as-a-Service is able to provide. In this article, Solaris – the pan-European leader in Banking as a Service – shares its vision for the industry and defines the main development paths in which major economic sectors might evolve under the impetus of the “banking revolution” brought by integrated and embedded finance.

With the surging number of new banking and fintech business models emerging on the scene, it can be hard to keep them all apart. The term “Banking as a Service”, especially, still has many scratching their heads. But scratch no more! This article will guide you through the jargon jungle of the new banking business models in our complete overview.

There are dozens of ways non-banks can improve their customer experience and boost their revenue by offering their own banking services. However, if you want to offer banking services, effectively every government in the world requires you to own a banking license. And due to the systemic relevance of banks to the functioning of the economy, such a license is difficult to obtain. Acquiring a license imposes not only significant capital requirements, but more importantly compliance with strict regulations on money laundering, banking secrecy and deposit protection, to name a few. This is where Banking as a Service comes in.

Banking as a Service (or BaaS for short) describes a model in which licensed banks integrate their digital banking services directly into the products of other non-bank businesses. This way, a non-bank business, such as an airline, can offer their customers digital banking services such as mobile bank accounts, debit cards, loans and payment services, without needing to acquire a banking license of their own.

The banks’ server communicates via APIs and webhooks with that of the airline, enabling your customer to access banking services directly through your airline’s website or app. Your airline never really touches the customer’s money, it acts simply as an intermediary, meaning it is not burdened by any of the regulatory duties a bank has to fulfill.

Thus, with BaaS, pretty much any business can become a banking provider with nothing but a few lines of code. That’s why BaaS is also often referred to as white-label banking, since the banking services are delivered through the branded product of the non-bank. Next toSolaris, other providers in Europe’s growing BaaS landscape include ClearBank, RailsBank and Starling Bank. Across the pond, established banking giants are also launching BaaS projects next to their existing offering, such as BBVA in the US.

Is Banking as a Service the same as open banking?

Not really. The two models often get confused, as open banking also involves banks connecting to non-banks via API. However, the models serve entirely different purposes. In BaaS models, non-bank businesses integrate complete banking services into their own products. In open banking models on the other hand, non-bank businesses merely use the bank’s data for their products. In the industry, these non-bank businesses are called third party service providers (TPPs).

Let’s look at an example. Financial management apps are prominent TPPs that benefit from open banking. They aggregate information from all of your different bank accounts into one application, enabling you to better oversee your finances. This can help you achieve savings goals or improve your spending habits. In order to aggregate the information, the app needs to draw transactional data from all of your bank accounts. It does this via an API integration to the banks’ systems.

Often, this API integration will be provided by yet another party. They are generally categorized as API banking platforms, and can be considered as the middle men connecting the banks with TPPs like the financial management app. They provide the actual API layer that sits on top of the bank’s system that enables the flow of data between the bank and the TPPs. Prominent examples in the German market include players like Finleap connect, Ndigit and Fintecsystems.

The key thing to remember though, is that different to BaaS providers, the TPPs are not able to perform banking services (such as lending or taking deposits), as they don’t hold full banking licences themselves. They are simply repurposing account information from your existing bank accounts to provide insights or trigger transactions.

And what about platform banking? Where does that fit in?

Platform banking is a different story altogether. This refers to banks that integrate services from other fintechs to augment their existing offering. So, for example, a bank might integrate a robo-advisor into their app to enable their customers to access investment products from the same account from which they do their day-to-day banking. Platform banking can thus be described as the inverse of Banking as a Service. In the platform banking model, the bank owns the customer and integrates services from fintechs. In the BaaS model, the customer is owned by the fintech/non-bank and integrates services from the bank.

Banks often use the platform banking approach as a defensive strategy to prevent losing their customers to savvier fintechs. By integrating the fintechs’ services into their platform, they can at least keep their customers in their ecosystem, even if it means handing over the lion share of the revenue to the fintech.

And there we have it. We hope Solaris could shed some light into the potpourri of technical terminology and business models in the evolving banking and fintech world. Still, this is just a snapshot of a slice in time. The banking landscape is in continuous flux with new innovators constantly stepping on the scene. So, watch this space to stay up to date on industry developments.

This content is provided by our Corporate Member Solaris

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amnis is a fintech startup from Switzerland that offers an international payment platform for SMEs to transfer money abroad, collect payments, and exchange currencies, all within a single tool. amnis was founded back in 2014 to reshape international banking for SMEs.

In recent months amnis has achieved incredible milestones: in just 1 year it has expanded from 1 to 6 countries and opened 4 further offices in Vaduz, Vienna, Prague, and Milan and they have customers from over 25 different countries. The biggest milestone, however, was announced just a few days ago: they’ve successfully closed a financing round of 8.6 million.

Collaborations are crucial, especially in the rapidly growing fintech sector: for some new features, external knowledge and resources must be combined to achieve the best possible outcome.
The amnis goal is to build an innovative, digital ecosystem to be able to benefit from the best technologies and knowledge, from video identification for customer onboardings to accounting system integrations.

The international team of more than 30 people is a unique combination of interdisciplinary experience and product knowledge, and all are highly motivated to build the SME banking solution.
In Italy, the team has 2 people and they will hire another 3-4 people in the next 12 months. They are currently expanding in all areas and locations to double the team by the end of this year.

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Soldo has recently joined the ranks of the Payments start-ups and scale-ups belonging to the Fintech District community. To better understand its business, we interviewed Founder and CEO Carlo Gualandri.

What does Soldo do and who is it aimed at?

Soldo is the leading European Spend Automation Platform, for businesses of all sizes. Beyond employee expenses and T&E, Soldo streamlines spend management for purchases, advertising, software subscriptions, e-commerce purchases, and all other company costs. From decision to allocate funds to departments and projects to the execution of outbound payments with cards or bank transfers, from the automated classification and reconciliation of transactions to the integration with accounting platforms Soldo delivers a unified and connected vision of spend across the entire organisation. Today, thousands of organizations across Europe, including small, medium and large businesses, use Soldo to manage spend the brighter way.

How has it grown in recent months?

Soldo has attracted a total of $260 million from international institutional investors including $180 million in the latest C round that will be used to increase turnover tenfold to 200 million euros in the four years after the pandemic. Soldo is expanding in Europe, where Soldo already has offices in Italy, United Kingdom, Ireland and France, and is continuously developing its platform to address and automate all the different types of company spend.

Have you done or would you like to do any open innovation projects? What kind and with whom?

At Soldo innovating in both software and financial services is part of our DNA. We support companies open innovation with a range of initiatives that allow the integration of the Soldo platform into the custom business logic of our clients allowing them to fully control our architecture according to their needs and we are constantly experimenting also with financial institutions on how they could make our proposition part of their product offering for selected segments of the market.

How is your team structured?

Soldo is a real European company, our team comprises people from over 27 nationalities, and there is no single headquarter as both London, Rome and Dublin each is the base of a number of divisions that in turn then interact with the teams present in each country we serve that contribute with the specialised knowledge and understanding of each market. We have currently over 350 employees and we are constantly growing.

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Fintech companies are full of talent and people with strong skills, and job positions in this sector continue to grow. Innovation in the financial sector has led to the creation of new jobs and roles. Today, we talk about this with Adecco, Professional Partner of Fintech District.

 Who exactly is Adecco and what do you do? 

Adecco is the company of The Adecco Group that develops and enhances human capital. 

It is the leading employment agency in Italy: every day we contribute to matching job supply and demand. We respond to the needs of protection, guarantee, and professional continuity of workers and meet the need for transformation expressed by companies in a world of continuous change.

Thanks to a team of 2,000 professionals and more than 300 branches throughout Italy, Adecco employs more than 45,000 people every day and is a partner to more than 11,000 clients.

Who are you addressing and what do you offer? What is your uniqueness and your added value?

We relate to companies and candidates every day: on the one hand, we help companies to take advantage of new growth opportunities by responding to the need for flexibility and quality with dedicated solutions and tailor-made services; on the other hand, we are a true partner for candidates and support them in their search for new job opportunities and in achieving their goals. 

Our uniqueness lies in guiding candidates through all stages of their career path and offering companies the best solutions to their needs. This is possible thanks to all the Adecco professionals who are active throughout the country. 

Why did you become interested in fintech? What opportunities do you see in this sector?

As Adecco, we have chosen to develop a specialized division – Adecco Financial Services – to support companies and candidates in the fintech sector, which is becoming increasingly popular in the market.

Having worked in the fintech sector for many years now, we have realized how the combination of technology and finance is becoming increasingly important. A company like Adecco, synonymous with innovation, start-ups, and the future of work, could only bring added value to companies and candidates in the panorama of new opportunities born in this sector.

How can you support the fintech community as a Professional Partner?

Adecco is part of the most important multi-brand platform of HR solutions and services. Thanks to our ecosystem we are therefore a valuable support for companies and candidates. We will provide the fintech companies of the Community with our know-how and experience in HR management, to support them in the growth, training (upskilling and reskilling), development, and management of human resources.

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