As Bitcoin mania spreads across the world at seemingly unstoppable speed, interest is on the rise in tiny Western Balkans countries such as Albania, Kosovo and Macedonia.
The number of miners and cryptocurrency investors in Kosovo have increased in recent years as the value of bitcoin started to hike rapidly in 2017, reaching the highest value ever since its introduction in 2009, $18,000 in December 2017. Currently the bitcoin price is a still attractive €3,136.
One of the reasons for the increased interest in Kosovo is the country’s high internet penetration rate of 83%.
According to Coin ATM Radar, three ATMs for virtual currencies are in operation in Kosovo's capital Pristina, with the first one introduced in 2017. Kosovo became the 57th country in the world with cryptocurrency ATMs. The machine is operated by Albvision Group.
The first machine started operations even though Kosovan’s central bank issued a warning about digital currencies in June 2017.
The Kosovan central bank warned that the use of virtual money, such as bitcoin is not regulated and legally constitutes a danger that can result in financial loss. All potential users of virtual cash are informed that in Kosovo there is no institution that guarantees the reimbursement of money lost.
Albvision also plans to introduce such machines in Macedonia, due to growing interest there. Currently crypto diggers and traders are forced to go to Bulgaria to take out cash from bitcoins. In Macedonia, paying in cryptocurrencies is not legal and the central bank also recently discouraged those interested in virtual money from trading due to the risks related to such transactions.
The interest in bitcoins and other virtual money is also rising in Albania and more cryptocurrency machines are expected in this country, mondaq.com reported on January 23. According to Coin ATM Radar, there is only one virtual ATM in Tirana.
The Albania central bank also issued a public warning last year on the risks related to the use of digital currencies.
Risks mentioned include instability of such currencies, for which there is no regulations, vulnerable platforms to cyber attacks, as well as possibility of using this currencies for illegal activities and for money laundering.
Despite this, the Albanian government announced plans to create regulations for virtual money, according to an article in the Tirana Times published in October 2018.
The newspaper quoted Albanian Prime Minister Edi Rama as saying that cryptocurrency can create a lot of opportunities even in a developing economy such as Albania and can attract potential investors.
“While no statistics are available yet for the past couple of years, Albanians invested about $1mn in online trading in international stock exchanges in 2015 when several unlicensed operators emerged, triggering concern by the country’s highest financial authorities,” Tirana Times said.
Since the launch of Bitcoin in 2009, other alternative cryptocurrencies have been introduced, reaching the number of 1,500 cryptocurrencies today, with an estimated market capitalisation of $252bn, according to mondaq.com.
In February 2018, the European Supervisory Authorities (ESAs) for securities (ESMA), banking (EBA), and insurance and pensions (EIOPA) issued a pan-EU warning to consumers regarding the risks of buying virtual currencies. The ESAs warned consumers that virtual currencies are highly risky and unregulated products and are unsuitable as investment, savings or retirement planning products.
On the other hand, cryptocurrencies are entering legal frameworks slowly but surely in some parts of the Balkan region. The latest example is Romania where the authorities amended the tax laws making it possible to start taxing gains from bitcoin investments at a rate of 10%.
The improved fiscal code legislation categories earnings generated from buying and selling cryptocurrencies as “income from other sources” and they are therefore subject to income tax, bitcoin.com reported on January 22, citing local media.