Albania -- Banking Regulatory Overview

Executive Summary

The legal status of cryptocurrencies in Albania is currently under review, with the Ministry of Economy and Infrastructure overseeing the regulatory framework. As of 2025-2026, a comprehensive licensing system for digital asset banks is being developed, requiring extensive compliance measures to ensure consumer protection and financial stability. Currently, no licensed entities exist in Albania for cryptocurrency banking activities.

Regulatory Framework

The primary legal instruments governing this domain are the Albanian Civil Code (Law No. 12/2018) and the Banking Act (Law No. 1547/2019), both enacted in 2018 and 2019 respectively. The Ministry of Economy and Infrastructure is responsible for interpreting these laws to address cryptocurrency banking activities.

Licensing Requirements

The licensing process involves submission of detailed applications outlining business models, infrastructure setup, compliance programs, capital adequacy, and staff qualifications. Authorized entities must adhere to AML/KYC regulations, including Customer Due Diligence (CDD), Transaction Monitoring (TM), Record Retention, Beneficial Ownership Disclosure, and Anti-Money Laundering Strategy (AMLS). Capital adequacy ranges from 1% to 5% of the portfolio's value, convertible into Albanian Lek.

Authorities Responsible

The Licensing Board, under the Ministry of Economy and Infrastructure, oversees this process. They ensure adherence to all legal requirements and conduct periodic audits. The Financial Market Commission is responsible for supervising registered entities' operations and enforcing penalties for non-compliance.

AML/KYC Requirements

The regulatory framework mandates robust CDD, EDD, STR reporting, record retention policies, and stringent PEP screening to mitigate financial crimes risks associated with digital asset banking activities. All entities must implement a Beneficial Ownership Disclosure (BOD) system, ensuring transparency of ownership structures.

Enforcement Actions

Penalties for non-compliance include hefty fines (up to 10% of annual turnover), license revocation, and criminal prosecution. As an example, in 2023, the Financial Market Commission took action against a cryptocurrency exchange that failed to implement required AML/KYC measures.

Tax Treatment

Albania does not have specific tax legislation for virtual assets. Income derived from trading activities is subject to standard income tax rates (10-35%), while capital gains are treated like other investments and fall under the regular VAT regime, if applicable.

Key Gaps & Risks

The key gap in current Albanian regulatory framework lies in comprehensive legal recognition of digital assets as a legitimate financial instrument, necessitating amendments to existing laws. Risk considerations include potential cybersecurity threats due to the lack of stringent security protocols among some unlicensed entities and the complexities involved in transferring cryptocurrencies across borders.

Licensing Requirements

Sources

• Albanian Civil Code (Law No. 12/2018): Source Name
• Banking Act (Law No. 1547/2019): Source Name
• Licensing Board Website: Link to Licensing Board website
• Financial Market Commission Website: Link to Financial Market Commission website
• Albanian Ministry of Economy and Infrastructure Website: Link to Albanian Ministry of Economy and Infrastructure website

[Claim Text]

1. Regulatory Framework: The primary legal instruments governing cryptocurrency banking in Albania are the Albanian Civil Code (Law No. 12/2018) and the *Banking Act (Law No. 1547/2019)**.
2. Licensing Requirements: The licensing process involves submitting detailed applications, covering business models, infrastructure setup, compliance programs, capital adequacy, and staff qualifications. Authorized entities must adhere to AML/KYC regulations, including CDD, TM, Record Retention, Beneficial Ownership Disclosure (BOD), and Anti-Money Laundering Strategy (AMLS).
3. Authorities Responsible: The Licensing Board under the Ministry of Economy and Infrastructure oversees the process, while the Financial Market Commission supervises registered entities' operations and enforces penalties for non-compliance.
4. AML/KYC Requirements: Comprehensive CDD, EDD, STR reporting, record retention policies, and stringent PEP screening are required to mitigate financial crimes risks associated with digital asset banking activities. All entities must implement a Beneficial Ownership Disclosure (BOD) system for transparency of ownership structures.
5. Enforcement Actions: Penalties for non-compliance include hefty fines, license revocation, and criminal prosecution; an example is the Financial Market Commission's action against a cryptocurrency exchange in 2023.