The Albanian Financial Supervision Authority approved a licensing regime for cryptocurrency exchanges, a first for the region, strengthening a crypto law 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 organisation, 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.
Decisions on applications will be based on protecting investors, and the public, promoting stability and transparency of financial markets, ensuring compliance with the law, adequate security systems, and protection from cyber-attacks. The regulation will also evaluate the company administrator, board of administration, supervisory board, and other key stakeholders.
Other requirements for licensing include having enough capital, which can be either in funds or through an insurance policy for professional liability.
The law “On financial markets based on distributed ledger technology” entered into force on 1 September 2020, but it has not been implemented yet because of the lack of bylaws. In November 2021, the authorities approved two regulations on capital adequacy and own funds and on licensing subjects that exercise the activity as a digital token agent.
In June of this year, the Albanian parliamentary assembly drafted a resolution to ask the Financial Supervisory Authority (FSA) to approve regulatory acts on cryptocurrency and digital currencies within 2022, as the country hopes to avail of advantages posed by the technologies.
It also referenced the recent MONEYVAL report that said additional measures were needed to deal with cryptocurrency risk.
“The next monitoring report for Albania concluded that this country has not significantly improved its measures to combat money laundering and terrorist financing by the FATF recommendations. Among other issues, the report examined new international standards applied to virtual assets, including cryptocurrencies and providers of such assets,” MONEYVAL said.
Albania is also set to start taxing cryptocurrency by the end of 2023.
(Alice Taylor | Exit.al)
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