Albanias central bank calling on potential investors to avoid buying digital currencies

Central banks and governments continue to make statements about the dangers of digital currencies, or, conversely, extolling their benefits. The most recent bank to issue such a warning is the central bank of Albania. The bank issued a strong statement warning citizens that digital divisions were not under the direct purvey of the country's banking sector regulations and that such vehicles carried extremely high levels of risk. It's unclear at this time which businesses in Albania would be effected should the central bank move to enforce its stance more concretely, though Local Bitcoins lists a handful of traders mainly Tirana. The Bank of Albania, issued a public notice warning Albanians of the risks related to the use of cryptocurrencies such as bitcoin. The bank wrote: “The Bank of Albania has not licensed any financial entity whose activities include the use of virtual currencies…therefore these activities are not subject to the regulatory and supervisory framework by the Bank of Albania.” This is the first time the Bank of Albania has issued a warning about bitcoin, which still has a very small market in the country with only a handful of Localbitcoin traders. This statement follows an earlier warning by the Albanian Financial Supervisory Authority about the risks of using any unlicensed online trading platforms. Central Bank of Albania Lists Five Most Important Bitcoin Risks in Public: First, the bank noted that the values of digital currencies are “quite unstable,” citing that they “can be manipulated” which could lead to significant losses for investors. In addition, the lack of liquidity could impede the conversion between them and fiat. Second, digital currency exchanges are unregulated and unregistered, which could also lead to losses. Third, some of these exchange platforms are “quite vulnerable to cyber attacks”, the bank explained. Investments could be at risk since these attacks can happen at any time and, in many cases, there may be no recovery option. Fourth, “while investments in these currencies are anonymous, they can be used by individuals to enable illegal activities such as money laundering, financing of terrorism or smuggling of illicit goods,” the bank detailed. Fifth , the bank described that “at the request of the aparente currency scheme, people need to actually digitize their identification, much like by scanning their passport, retina or fingerprint”. The identification tools each uses “are not susceptible to the laws and regulations for the policy cover of personal data or security and safety standards. Consequently, there is no make sure these credentials will be employed safely to avoid their burglary or misuse.” The central bank stated that it hasn't issued any licensure to businesses brokering or exchanging digital currencies in Albania. It's a missive that largely echoes those issued by other central banks in the past several years. The anonymity and decentralization provided by Bitcoin made the nefarious activity not only possible but probable, and the bank warned against the clear risks taken by those choosing to invest.