Italy

Confidentiality is workable so long as the regulated firm can identify the parties and disclose on demand. Encrypted amounts are not the thing being restricted.

What Italy actually says

Italy's national addition was a reporting channel rather than a prohibition, and it went further than the European baseline in an unusual direction. Providers registered in the special section had to transmit, every quarter, identification data for each customer together with summary data on that customer's overall activity in Italy. That is customer-level reporting to a registrar, on a fixed cycle, with no suspicion trigger and no transaction threshold. Nothing comparable exists in the EU rules the framework sat on top of. On the questions this section is otherwise about, Italy is quiet: we found no restriction on anonymity-enhancing assets and no national rule on self-hosted wallets.

What this means for confidential transactions

Bubble is built for exactly this shape of obligation: amounts and balances live on chain as ciphertexts, computation happens without decryption, and the only disclosure path is an on-chain access list through which an authorized party - an auditor, a supervisor, a counterparty - can request scoped decryption. That is confidentiality from the public, not from the regulator.