The guides to the tourists of the country often say that there “the cash is king”, yet the premier Edi Rama dreams of making Albania the first nation in the world completely cashless By 2030. A revolution, rather than a reform, destined to change from the foundations a company in which we still prefer to keep the savings under the mattress (next to an AK-47, as a national joke says) rather than entrusting them to banks.
According to Rama and his supporters, the cash firm would be a direct blow to the gigantic informal economy that weighs on Albania. “The elimination of cash is an absolute priority for countries with high levels of informality and destabilizing quantities of illegal money in the financial system,” Selami Xhepa, professor of economics at the University of Tirana, told politician.
The plan
The European Commission has defined the Albanian informal economy as “one of the greatest obstacles to economic development and competition”. The estimates speak of a submerged GDP ranging between 29 and 50 percent of the total. To combat it, the government has a series of measures in the pipeline: a maximum ceiling for cash purchases, the integration into the separate European system since October, and the short launch of instant payments.
“We already have an operational strategy,” explained Spiro Brumbulli, secretary general of the Albanian banking association. “The goal is to make it easier, more safe and less expensive to use digital tools than cash.”
Confidence is missing
But, as political says, the social and historical context is far from favorable. Less than 50 percent of Albanians has a bank account. And only 34 percent say they trust banks. “Many still bring the savings on them,” said a salesman in the center of Tirana who. Same script by taxi and on the bus: no digital, only cash, “40 lek”.
The collective trauma linked to the collapse of banks and pyramidal schemes in the 90s is still alive. At the time, a sixth of the population had invested all the savings in scaming companies that promised very high returns. When the first funds began to collapse, in January 1997, addressed addressed throughout the country. Law enforcement officers fled, the military arsenals were sacked and over a million weapons ended up in the hands of the population.
The country sank into a spiral of violence, with armed gangs, feuds and widespread shootings. The victims were hundreds, perhaps up to 2,000, according to some estimates. “That trauma left a deep distrust towards the banking system and institutions,” explains Xhepa.
Dear ATMs and rigid banks
To the historical damage is added a structural problem. The banks, many say, are dear and not very efficient. “Interest rates are high for loans and very low for savings,” Xhepa explained. “And international transfers are very expensive, discouraging the remittances of the emigrants”.
An example? Send 500 euros can cost up to 50 euros of commissions. Even internal payments between Albanian banks are not free from high rates. The exchange rates between Lek and Euro are often unfavorable. It is not surprising that many merchants prefer cash, also to avoid paying up to 3.5 percent of commissions on payments with paper. “Some operators even pay more customers who use the card,” Brumbulli confirmed.
Between doubts and political criticisms
Not everyone believes that Albania is ready. Genc Pollo, founder of the Democratic Party and former vice premier, has liquidated the project as “an attack on personal freedom of those who legitimately have banknotes”. “Prohibiting cash is like killing hens with artillery,” he said. According to him, it would be more useful to focus on more intelligent regulation and opening to the competition of online platforms and crypts.
Erald Kapri, deputy of the center -right party opportunity, also suspected political motivations: “It is only one of Rama’s finds to distract public opinion from the real problems of the country, such as corruption and cost of living”.
