Albania

{
  "analysis_text": "Albania presents a unique regulatory case where a comprehensive legal framework exists on paper but has failed to materialize in practice, placing the jurisdiction in a \u0027Gray-Zone.\u0027 In May 2020, Parliament passed Law No. 66/2020 \u0027On Financial Markets Based on Distributed Ledger Technology,\u0027 which was intended to make Albania a regional pioneer by licensing exchanges and custodians. The law entered into force in September 2020, and the Financial Supervisory Authority (AFSA) approved necessary bylaws in late 2022. However, as of early 2025, reports confirm that not a single entity has been licensed under this regime, rendering the local regulated market non-existent.\n\nDue to the lack of licensed local providers, Albanian retail investors primarily utilize international platforms such as Binance and Kraken. This activity is legally permitted and recognized by the state, evidenced by the inclusion of virtual assets in the tax code. Effective January 1, 2024 (under legislation passed in 2023), income from cryptocurrency trading is classified as investment income and subject to a 15% capital gains tax. This creates a dichotomy where the activity is taxed and legal, but the intended domestic infrastructure for safe trading is absent.\n\nRecognizing the ineffectiveness of the 2020 legislation, Albanian authorities introduced a new draft law in late 2024 titled \u0027On Crypto-Asset Markets.\u0027 This proposed legislation aims to transpose the European Union\u0027s Markets in Crypto-Assets (MiCA) regulation into national law. The move is part of Albania\u0027s broader effort to align its financial system with EU standards as a candidate country. The new draft seeks to correct the \u0027loopholes\u0027 and overly burdensome requirements of the 2020 law that deterred applicants.\n\nUntil the new MiCA-aligned law is enacted and successfully implemented\u2014resulting in actual licensed entities\u2014Albania remains in a regulatory gray area. The legal \u0027sovereignty\u0027 exists, but the operational reality is one of an unregulated market where users depend on offshore entities. Enforcement is currently focused on taxation and AML compliance via the Financial Intelligence Unit, rather than prudential supervision of exchanges.",
  "confidence_level": "High",
  "executive_summary": "Retail cryptocurrency trading in Albania is currently legal and taxed, but the regulatory framework remains in a state of transition and practical non-implementation. Although Albania enacted the comprehensive \u0027Law No. 66/2020\u0027 to license crypto exchanges, reports from late 2024 and 2025 confirm that no entities have successfully obtained a license under this regime. Consequently, the government has introduced a new draft law to align with the EU\u0027s MiCA regulation, leaving the market in a \u0027gray zone\u0027 where trading occurs on foreign platforms without local oversight.",
  "grounding_urls": [
    {
      "resolved_url": "https://www.voxnews.al/english/biznes/rregulla-te-reja-per-tregun-e-kriptomonedhave-ne-shqiperi-i105284",
      "title": "voxnews.al",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQG84IbQDVmMQfYYoRgstUEQ6NLuAv_-i2vOddwkaF91QZoYpmlqApHS7KiNAYU8zFJSR6p9f2mEy2GBDu2g-uZqrMRi_f91GcGDRcVD9L6TH6iSyIBY6BAaOWTRvn_LAEjPQgxRH69NrAYv5cc6O_S7lHmFynTntvDvE7w09GyEdkTMF57Hgxxac-H0vxqYsZz2yb4mY7LD0P5dKHkqYOY8bo8="
    },
    {
      "resolved_url": "https://scantv.al/english/lajme/shqiperia/shqiperia-per-here-te-pare-me-nje-ligj-per-kripto-asetet-transpo-i28066",
      "title": "scantv.al",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHORxeMzn_ZiJcPBHrBcHQVFdv_T4GDd2jj-eVUcoTWLO0ru2NIyqici_N4MPFNRi5HEklj_1NUoe3w0xIT0jHV9fMC-640J9urd4aWsP9IOKoN5MUpbLt1M37n4EtuRXhGaFgHojWGyTUwo0KaFX9e0M_wOCBsdM1uF2-rZmyOGT5kfaeNpVDLKbq6mgy2KwCIHHB0jCr4EX6SgGRmtM8_XlC9E72gZ8UH10IV"
    }
  ],
  "status": "Gray-Zone",
  "structured_data": {
    "confidence_level": "High",
    "detailed_analysis": "Albania presents a unique regulatory case where a comprehensive legal framework exists on paper but has failed to materialize in practice, placing the jurisdiction in a \u0027Gray-Zone.\u0027 In May 2020, Parliament passed Law No. 66/2020 \u0027On Financial Markets Based on Distributed Ledger Technology,\u0027 which was intended to make Albania a regional pioneer by licensing exchanges and custodians. The law entered into force in September 2020, and the Financial Supervisory Authority (AFSA) approved necessary bylaws in late 2022. However, as of early 2025, reports confirm that not a single entity has been licensed under this regime, rendering the local regulated market non-existent.\n\nDue to the lack of licensed local providers, Albanian retail investors primarily utilize international platforms such as Binance and Kraken. This activity is legally permitted and recognized by the state, evidenced by the inclusion of virtual assets in the tax code. Effective January 1, 2024 (under legislation passed in 2023), income from cryptocurrency trading is classified as investment income and subject to a 15% capital gains tax. This creates a dichotomy where the activity is taxed and legal, but the intended domestic infrastructure for safe trading is absent.\n\nRecognizing the ineffectiveness of the 2020 legislation, Albanian authorities introduced a new draft law in late 2024 titled \u0027On Crypto-Asset Markets.\u0027 This proposed legislation aims to transpose the European Union\u0027s Markets in Crypto-Assets (MiCA) regulation into national law. The move is part of Albania\u0027s broader effort to align its financial system with EU standards as a candidate country. The new draft seeks to correct the \u0027loopholes\u0027 and overly burdensome requirements of the 2020 law that deterred applicants.\n\nUntil the new MiCA-aligned law is enacted and successfully implemented\u2014resulting in actual licensed entities\u2014Albania remains in a regulatory gray area. The legal \u0027sovereignty\u0027 exists, but the operational reality is one of an unregulated market where users depend on offshore entities. Enforcement is currently focused on taxation and AML compliance via the Financial Intelligence Unit, rather than prudential supervision of exchanges.",
    "executive_summary": "Retail cryptocurrency trading in Albania is currently legal and taxed, but the regulatory framework remains in a state of transition and practical non-implementation. Although Albania enacted the comprehensive \u0027Law No. 66/2020\u0027 to license crypto exchanges, reports from late 2024 and 2025 confirm that no entities have successfully obtained a license under this regime. Consequently, the government has introduced a new draft law to align with the EU\u0027s MiCA regulation, leaving the market in a \u0027gray zone\u0027 where trading occurs on foreign platforms without local oversight.",
    "important_considerations": [
      "Zero licensed local exchanges exist despite the 2020 law, forcing traders to use foreign platforms.",
      "Capital gains from crypto trading are taxed at a flat rate of 15%.",
      "The 2020 law is widely considered a \u0027failure\u0027 by local experts due to strict requirements that discouraged applicants.",
      "Albania is an EU candidate country, driving the push to adopt MiCA-aligned regulations by 2025.",
      "Banks generally do not process crypto transactions directly, but no explicit banking ban exists for individuals transferring to foreign exchanges."
    ],
    "key_regulatory_pillars": [
      "Financial Supervisory Authority (AFSA/AMF) (Primary Regulator)",
      "National Agency for Information Society (AKSHI) (Technical Licensing Partner)",
      "General Directorate of Taxation (Enforces 15% Capital Gains Tax)",
      "Financial Intelligence Unit (FIU) (AML/CFT Oversight)",
      "Bank of Albania (Monetary Policy \u0026 Payment Systems)"
    ],
    "landmark_legislation": [
      {
        "date_enacted": "2020-05-21",
        "identifier": "Law No. 66/2020",
        "name": "Law No. 66/2020 \u0027On Financial Markets Based on Distributed Ledger Technology\u0027",
        "summary": "Established a licensing regime for DLT exchanges and custodians. Divided licenses into three categories (A, B, C) based on services offered. Despite being in force since September 2020, it failed to produce any licensed entities.",
        "url": "https://amf.gov.al/"
      },
      {
        "date_enacted": "2023-01-01",
        "identifier": "Law No. 8438 (Amended)",
        "name": "Law on Income Tax (Amended)",
        "summary": "Explicitly categorizes income from virtual assets as taxable investment income, imposing a 15% capital gains tax on profits derived from cryptocurrency trading.",
        "url": "https://www.tatime.gov.al/"
      },
      {
        "date_enacted": null,
        "identifier": "Draft Law (2024/2025)",
        "name": "Draft Law \u0027On Crypto-Asset Markets\u0027",
        "summary": "A proposed replacement for the 2020 law, designed to fully align Albania\u0027s framework with the European Union\u0027s Markets in Crypto-Assets (MiCA) regulation. It aims to address the shortcomings of the previous law.",
        "url": null
      }
    ],
    "notes_and_comments": "The \u0027Allowed-Regulated\u0027 status was rejected because the \u0027Red Flag\u0027 criteria (No licences issued after 12+ months) was met. The 2020 law is effectively a \u0027zombie\u0027 legislation. The status is best described as Gray-Zone due to this gap between legal theory and operational reality.",
    "primary_sources": [
      {
        "date": "2022-10-04",
        "key_quote": "The Board of the Financial Supervision Authority (AMF) approved... regulations on the licensing of entities operating as a DLT Exchange.",
        "source_type": "regulator",
        "title": "Albanian Financial Supervisory Authority (AFSA) - DLT Law Overview",
        "url": "https://amf.gov.al/"
      },
      {
        "date": "2024-01-01",
        "key_quote": "Investment income... is taxed at the rate of 15%.",
        "source_type": "official_government",
        "title": "General Directorate of Taxation - Income Tax Law",
        "url": "https://www.tatime.gov.al/"
      }
    ],
    "remaining_uncertainties": [
      "Exact timeline for the passage and implementation of the new MiCA-aligned draft law.",
      "Whether the new law will automatically void the 2020 law or provide a transition period.",
      "Specifics of how the 15% tax is enforced on users trading on foreign, non-reporting exchanges."
    ],
    "secondary_sources": [
      {
        "date": "2024-11-27",
        "key_quote": "The current 2020 law failed to create a regulated market, no companies were licensed...",
        "source_type": "news",
        "title": "Albania will draft a law on cryptocurrencies and digital assets by 2025",
        "url": "https://telegrafi.com/shqiperia-do-te-hartoje-nje-projektligj-per-kriptomonedhat-dhe-asetet-digjitale-deri-ne-vitin-2025/"
      },
      {
        "date": "2024-11-27",
        "key_quote": "Although Albania has created a legal framework... in fact to date there is no entity licensed for this purpose.",
        "source_type": "news",
        "title": "Crypto-assets, new law in Albania revealed",
        "url": "https://insajderi.org/kripto-asetet-zbardhet-ligji-i-ri-ne-shqiperi-synon-rregullimin-e-funksionimit-te-tregut-kripto/"
      }
    ],
    "status": "Gray-Zone"
  }
}