The efforts being put to effectively regulate the blockchain and cryptocurrency industry could see the Balkans leap big. The region only needs an effective regulatory framework on the disruptive technology if it is to boom.
The Balkan region is ordinarily characterized as comprising around 6 countries including North Macedonia, Albania, Montenegro, Bulgaria, Kosovo, Romania, Bosnia and Herzegovina, Serbia, Croatia, and Slovenia.
Even though the region is still dominated by cash a traditional means of making transitions, a massive increase in the use of online payments systems has been registered especially during this period of the Covid-19 pandemic - the figure of online payments is rising. Governments located within this peninsula have been encouraging their citizens to reduce the use of cash and adopt cashless methods of payments including Bitcoin and other forms of digital currency, the Balcan Insight reports.
Before Yugoslavia was dissolved in 1990, it was hit by hyperinflation and this decreased people’s trust in traditional financial institutions including the banks, and this has helped the use of Bitcoin and cryptocurrency to gain momentum in the region.
According to reports of local magazines, people in this region are looking at cryptocurrency as an investment opportunity, and as a censorship-resistant – users can conduct transactions with the cryptocurrency network on the same terms, notwithstanding their individual identifying and pinpointing characteristics.
The low cost of electricity has enabled cryptocurrency mining business in the region to grow and flourish - the uppermost price of electricity in Western Balkans is in Montenegro is around €9.7 per 100 kWh, Bosnia and Herzegovina is at €8.6, in Albania is at €8.4 and Macedonia stands at almost €8.2. The friendly environment to innovations in the region could trigger more developments in decentralized solutions including blockchain-based financial services.
Some countries have moved a step as far as the regulation of the industry is concerned. For instance, Serbia is drafting guidelines on the fintech sector and this could see it grow to financial industry 2.0.
In Bulgaria, travellers can now receive the compensation in BTC in case they miss their flights. In Croatia, shoppers can purchase goods from some stores and then pay using cryptocurrencies. Real estate assets worth about 30 mln will be tokenized by some blockchain tech platforms, and this will allow token holders to get dividends in the form of fiat-powered stablecoins, accumulated from rental revenue.
Generally, the creation of a friendly levelled-ground and implementation of digital currencies and distributed ledger technology in the region is enduring and the results have started to show. So, clear regulations are needed as soon as possible to reduce the load on firms working in this lucrative space.