Central bank warns Albanians not to invest in Bitcoin

Tirana Times
By Tirana Times July 14, 2017 13:40

Central bank warns Albanians not to invest in Bitcoin

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  • “We appeal to the Albanian public to be mature and responsible in the administration of savings or liquidity they possess. One should orient investments toward financial products and instruments offered by institutions licensed and supervised by the Bank of Albania and the Financial Supervisory Authority,” the central bank says

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TIRANA, July 14 – Albania’s central bank has warned potential investors of a series of risks related to investing in digital currency such as Bitcoin, the primary cryptocurrency.

The warning comes following concern that some unlicensed operators are luring Albanians to invest in Bitcoin, whose value has soared to about $2,400, from almost zero in 2009 when it was launched.

Albania’s central bank says the legal and regulatory framework in place does not envisage carrying out such operations in Albania and investors and users are exposed to several risks.

“The Bank of Albania has licensed no financial operator whose activity involves the use of virtual currencies. As a result, every company that is involved in these operations in the Republic of Albania is not licensed and its activity does not comply with the regulatory and supervisory framework of the Bank of Albania,” says the central bank.

The Bank of Albania says the activity of virtual currency operators is characterized by a considerable level of risk and insecurity, with no full guarantees on the customers’ protection from investment losses and involvement in any operation remains an action of individual responsibility.

The central bank warns that while electronic money is a legally regulated and supervised activity even in Albania, the virtual currency is an activity completely out of the authorities’ watch and control.

“We appeal to the Albanian public to be mature and responsible in the administration of savings or liquidity they possess. One should orient investments toward financial products and instruments offered by institutions licensed and supervised by the Bank of Albania and the Financial Supervisory Authority,” the central bank says.

The European Banking Authority has earlier warned risks associated with buying, holding or trading virtual currencies include losing the money on unregulated exchange platforms which may go out of business, fail or be hacked by third parties. Virtual currency users are also unprotected when using it as a means of payment and its value can change quickly and even drop to zero.

Albania’s central bank says that because of the high degree of anonymity, transactions in virtual currency may be misused for criminal activities, including money laundering, terrorism financing or smuggling of goods.

Bitcoin is legal in most countries around the world, with the U.S., Canada, Denmark, South Korea rated among the top Bitcoin-friendly countries. Earlier this year, Japan officially recognized Bitcoin as a legal payment method.

Albania’s central bank says all relevant stakeholders, national and international, including the European Banking Authority and the European Central Bank, are intensively working to assess issues related to the virtual currency, in order to make its adequate regulation and supervision.

Earlier this year, the country’s financial supervisory authorities warned investors about risks in investing in unlicensed online trading platforms after identifying two unlicensed operators tricking Albanians.

Potential investors are being lured by online brokers through phone calls and aggressive marketing campaigns at a time when only three brokers have been licensed by the Financial Supervisory Authority and the Bank of Albania to offer such services.

While no statistics are available yet for 2016, Albanians invested about $1 million in online trading in international stock exchanges in 2015 when several unlicensed operators emerged, triggering concern by the country’s highest financial authorities.

Online trading platforms offer investors opportunities to invest in financial products in international stock exchanges, mainly in government securities, foreign exchange and commodity products such as oil and precious metals.

The country’s highest financial authorities say such investments are highly risky, especially if offered by unlicensed operators and used by investors lacking appropriate knowledge.

Rising interest to invest in online platforms and most recently virtual currency comes at a time when interest to invest in traditional bank deposits has waned due to interest rates dropping to slightly above zero and when the emerging investment funds are facing a slowdown due to a sharp drop in bond yields as the key interest rate stands at a historic low of 1.25 percent.

 

Tirana Times
By Tirana Times July 14, 2017 13:40