The central bank of Albania has published a public notice warning potential investors against buying or adopting digital currencies like bitcoin.
“The Bank of Albania has not licensed any financial entity whose activity includes also virtual currencies,” the official notice from the governor’s office at the central bank read. “Consequently, the companies involved in this activity in the Republic of Albania are not licensed, and therefore their activity is not subject to the regulatory and supervisory framework of the Bank of Albania.”
The public notice echoes statements made by other central banks around the world, including the likes of India. The Bank of Albania’s statement lists – in particular – five risks that the institution sees the public to be made aware of when it comes to investing in digital currencies.
1. The volatility in the value of cryptocurrencies. “Currencies’ value can be manipulated, causing the investor to face a significant loss beyond his control.
2. The unregulated and sometimes unknown exchangers of virtual currencies. “Anyone who invests their money in virtual currency exchanged by these companies will face the risk of loss.”
3. Open to cyberattacks. The central bank compared the lack of coverage or protection against losses at digital currency exchanges, compared to traditional mechanisms like the ‘deposit insurance fund in banks’.
4. Anonymity could lead to illegal activities, “such as money laundering, terrorism financing, or smuggling of goods.”
5. KYC software and frameworks at exchanges aren’t subject to any existing laws and regulations. This, the central bank argues, means “there is no guarantee that these [user] credentials will be safely administered to avoid their theft or misuse.”
You can read more on the topic here. I understand that it is the job of any central bank to protect the very interest of the people they are serving and I have no problem with that. We have to honestly evaluate the warning as a way to deal with cryptocurrency with caution and that is what a good investor should do...we have to do our due diligence since there will always be risks anywhere.
I have heard some other central banks who did the same thing before. These five issue presented here are actually very legitimate issues that maybe the whole cryptocurrency community should be addressing head-on. Unfortunately, being a decentralized community all loving a decentralized currency, getting a certain consensus can take forever.
