Albanian Financial Supervision Authority Approves Crypto Licensing Regime

Albanian Financial Supervision Authority has approved a licensing regime for crypto exchanges for the first time in the region. It is aimed at strengthening a 2020 crypto law.

The law will be applicable to digital currency exchanges that use blockchain’s distributed ledger technology to hold digital tokens and assets. 

Under the newly introduced 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 it 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 due to the lack of bylaws. 

In November 2021, 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.