Over the past few months there have been multiple reports that the Albanian government are considering making the country a “crypto-friendly” jurisdiction.
Various posts on crypto-news websites have spoken of the government mulling over crypto-regulation in a bid to become a regional hub for the controversial industry. The official line is that they hope to create new jobs and diversify investment opportunities in the industry.
Despite having previously and recently issued warnings about the industry and the dangers of investing in the largely unregulated market, they government now seem to have changed its tune. Whilst the move would bring the country into line with some more progressive EU states such as Malta aka “The Blockchain Island”, there are a number of concerns on a global scale that need to be solved before the industry can be considered as legitimate.
Of course, legitimacy has never stopped the Albanian government and any regulations that could possibly be introduced would be essentially speculative as there is no real blueprint for regulation in the industry at the moment.
In a country that is ravaged by systematic tax evasion, corruption, and money laundering, is encouraging the use of a product that can facilitate all of these with considerable ease, really a good thing?
“For the moment, we are assessing and working on the drafting of a regulatory framework after having conducted a thorough analysis and study. If the results are satisfactory, then we will promote even outside Albania, the country’s willingness to become a hub for numerous potential investors that target getting involved in this revolution of global finances.”
Cryptocurrency such as Bitcoin has its roots in the dark web and was used predominantly on the black market to facilitate the purchase and trade of illicit goods. Since the currency became more widespread and more and more copy-cat currencies sprang up, it has seen more and more nefarious use cases emerge.
Completely anonymous in nature, the way cryptocurrency works means that money can be laundered via exchanges and digital wallets with no way of tracing who the actual owner of the coins are. Estimates vary in terms of how much is laundered globally each year but California based blockchain security firm CipherTrace stated it could be as much as $1.2 billion dollars a year.
The EU has attempted to update its Anti Money Laundering Directive to cover the threat posed by cryptocurrency, but it is unlikely to make any difference to those that are determined to deal illicitly.
With Albania ranking as one of the worst offenders in Europe in terms of money laundering and the OCCRP calling out the authorities for failing to meet basic standards in its prevention, do we really need another way to facilitate this illegality? According to the Council of Europe, not only is money laundering a huge problem in Albania, the authorities are not prosecuting those found to be acting illegally.
Whilst blockchain technology could be a viable way to create jobs, economic benefit, and even to reduce corruption and money laundering in the country, introducing cryptocurrency is most definitely not.