Albania: Overview of Crypto Regulations

Albania is one of the few countries in Europe that is actively working on the legalization of cryptocurrencies and its gradual introduction into common capital markets. In this regard, Albania has adopted special laws that define in detail the legal status of virtual assets, the rules of their circulation, as well as the accompanying legislation on the prevention of money laundering and terrorist financing in the sphere of circulation of virtual assets.

Yes. In 2017, Albania became the first country in Europe to recognize blockchain-based digital currency as an official form of payment.

In June 2022 the Albanian Financial Supervision Authority approved a licensing regime for cryptocurrency exchanges, a first for the region, strengthening a crypto law On financial markets based on distributed ledger technology passed in 2020.

The law refers to distributed ledger technology exchanges which are exchanges where blockchain is used along with digital tokens, digital assets, and those that use both digital assets and fiat currency. Under the licensing regime, DLT exchanges will fit under one of three categories; those that use just digital assets and digital tokens, those that use fiat and virtual currency, and those that trade digital securities.

The licenses will be issued based on submitting detailed documentation, including company organization, business plans, source of capital, and reputation. Once the application has been submitted, the responsible authorities will pass the file to a joint commission to review and evaluate in line with the law.

Popular exchanges for buying and selling cryptocurrencies are Binance, CEX.IO, Kraken. An Albanian ID card (Letërnjoftim) or Passport is required for the KYC procedure.

According to coinatmradar.com there are no crypto ATMs in Albania.

In Albania, the rules for ICOs and token issuance are regulated by the DLT Law, which sets out the requirements for storing and transferring digital tokens or virtual currencies. It states that a "third-party storage wallet provider" must be licensed by the Bank of Albania to handle these transactions.

The DLT Law also classifies tokens based on their purpose:

Payment tokens: These tokens are used as a method of payment.

Security tokens: These tokens are used as a form of security, similar to stocks or bonds.

Asset tokens: These tokens are treated as investment products.

For asset token offerings that require a full prospectus to be published, the total value of the offering must be equal to or exceed €1,000,000.00 or its equivalent in Albanian Lek, calculated over a period of 12 months.

Albania remains on the FATF grey list due to concerns about its AML/CFT measures, meaning that the country is under increased monitoring. Nevertheless, the AML regulations specifically apply to services related to the purchase, sale, transfer, and custody of virtual assets, which includes tokens.

According to the AML/CFT Law, virtual assets are defined as digital representations of value that can be traded or transferred digitally and used for payment or investment purposes. Virtual asset service providers, which include businesses and individuals, are required to comply with AML regulations if they engage in activities such as exchanging virtual assets for fiat currencies, exchanging between different virtual assets, transferring virtual assets, providing custody or management services for virtual assets, or participating in financial services related to the offer and sale of virtual assets by issuers.

In summary, these regulations cover a wide range of activities related to ICOs, token issuance, and the handling of virtual assets, including exchanges, transfers, custody services, and financial services involving virtual assets.

Albania has managed to develop a solid system of cryptocurrency legislation. However, it should also be taken into account that Albania has EU candidate status, which suggests that its legislation may be subject to significant changes, as Albania has obligations to adopt and implement EU legislation into its national one.