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ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 17, No. 2 (2023), pp. 105-109 

 

105 

 

ENHANCING BANKING SYSTEMS THROUGH BLOCKCHAIN 

TECHNOLOGY: A CURRENCY SITUATION STUDY 

 

B. LEKA (MOÇKA), D. LEKA, A. MALAJ 

 

Blerta Leka (Moçka)1, Daniel Leka2, Ariet Malaj3 

1Agricultural University of Tirana, Albania 

ORCID No.: 0009-0000-6734-8237, E-mail: bmocka@ubt.edu.al  
2 Special Court of First Instance for Corruption and Organized Crime, Albania 
3 University College of Business, Albania 

 

Abstract: Blockchain technology, initially designed for cryptocurrencies like Bitcoin, has 

emerged as a powerful tool in the financial sector. This study explores its potential integration into 

the Albanian banking system. The Albanian banking sector, like others worldwide, faces challenges 

in currency management, security, and efficiency. The research assesses how blockchain can address 

these issues and aligns with Albania's existing regulatory framework. The study begins with an 

overview of Albania's banking sector, highlighting key regulations and practices. It emphasizes the 

limitations of traditional banking systems, particularly related to transparency, security, and cross-

border transactions. Blockchain technology's key attributes, such as immutability and transparency, 

are examined as potential solutions. Specific blockchain applications in Albania, like cross-border 

payments, digital identity verification, and supply chain finance, are considered. The comparative 

analysis evaluates how blockchain can enhance efficiency, reduce transaction costs, and increase 

access to financial services in the Albanian banking system. It also highlights the need for regulatory 

adjustments to accommodate this technology. Challenges, including regulatory compliance, 

cybersecurity concerns, and interoperability, are addressed, along with strategies to mitigate them. 

This research provides a comprehensive view of the opportunities and challenges of blockchain 

technology in Albania's banking system, aiming to inform policymakers, financial institutions, and 

stakeholders about the potential benefits of adopting blockchain solutions while considering 

regulatory adjustments to create a secure and efficient financial landscape in Albania. 

Keywords: Blockchain Technology, Albanian Banking System, Financial Operations and 

Permissioned Blockchains. 

 

INTRODUCTION 

Blockchain technology has emerged as a disruptive force in the global financial industry, 

offering potential solutions to various challenges faced by traditional banking systems. This literature 

review aims to provide insights into the application of blockchain technology in the banking sector, 

specifically focusing on currency management and financial operations. Additionally, it will shed 

light on the regulatory framework and current currency management practices within the Albanian 

banking system. Numerous studies and case analyses have explored the various applications of 

blockchain technology in the banking sector. Blockchain's role in facilitating secure and transparent 

transactions, particularly cross-border payments, has been a subject of extensive research. Studies by 

Tapscott and Tapscott (2016) and Mougayar (2016) have highlighted the benefits of blockchain in 

reducing transaction costs, settlement times, and counterparty risks. Furthermore, Kshetri (2017) 

mailto:bmocka@ubt.edu.al


ENHANCING BANKING SYSTEMS THROUGH BLOCKCHAIN TECHNOLOGY: A CURRENCY 

SITUATION STUDY 

 

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emphasized blockchain's potential to foster financial inclusion by providing secure and accessible 

banking services, even in underserved regions. 

In the context of the Albanian banking sector, this study seeks to build upon this existing body 

of knowledge by investigating how blockchain technology can address the specific challenges and 

opportunities within the Albanian financial landscape. It will analyze the potential alignment of 

blockchain solutions with Albanian financial regulations and operational practices, offering valuable 

insights for policymakers, financial institutions, and stakeholders aiming to harness the 

transformative power of blockchain while considering necessary adjustments to regulatory 

frameworks. This research aims to provide a comprehensive view of the opportunities and challenges 

presented by blockchain technology in the Albanian banking system. 

 

CURRENCY MANAGEMENT AND FINANCIAL OPERATIONS 

Currency management, a critical aspect of banking operations, involves the efficient handling 

of fiat currencies, liquidity management, and currency exchange. Blockchain's application in this 

domain has attracted attention due to its ability to streamline processes and minimize operational 

risks. Research conducted by Böhme et al. (2015) and Natarajan and Ali (2017) have explored 

blockchain's role in optimizing liquidity management through real-time settlement systems and 

tokenization of assets. These studies indicate that blockchain can enhance the liquidity and 

management of currencies within the banking ecosystem. 

 

Regulatory Framework and Currency Management Practices in Albania 

The Albanian banking system operates within a specific regulatory framework influenced by 

national laws and international standards. To understand the context in which blockchain technology 

may be integrated, it is essential to analyses the existing regulatory environment and currency 

management practices in Albania. The Albanian Financial Supervisory Authority (AFSA) plays a 

pivotal role in overseeing the banking sector's compliance with regulations. The Banking Law of 

Albania, as of the last knowledge update in September 2021, provides the legal framework for 

banking activities in the country. Currency management in Albania encompasses currency issuance, 

exchange rate policies, and foreign exchange market operations. The Albanian central bank, the Bank 

of Albania, is responsible for formulating and implementing these policies. 

 

BLOCKCHAIN TECHNOLOGY  

Blockchain technology has gained prominence in the financial sector as a potential solution 

to various operational challenges. To assess the suitability of blockchain for the Albanian banking 

system, it is imperative to evaluate its technical aspects, including scalability, security, and 

interoperability with existing banking systems. Additionally, we will explore specific blockchain 

platforms and solutions that could be relevant in the Albanian context. 

 

Scalability 

Blockchain technology's scalability has been a subject of concern, particularly in public 

blockchains like Bitcoin and Ethereum. These platforms face limitations in transaction throughput 

and processing speed, which can hinder their use for high-volume banking operations. However, 



Blerta LEKA (MOÇKA), Daniel LEKA, Ariet MALAJ 

 

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several blockchain projects have focused on addressing scalability issues. Solutions like sharding, 

layer 2 protocols (e.g., Lightning Network for Bitcoin), and consensus algorithm enhancements (e.g., 

Proof of Stake) have shown promise in increasing blockchain scalability. It is crucial to assess the 

scalability of blockchain platforms and solutions in the context of Albanian banking operations to 

ensure they can handle the expected transaction volumes efficiently. 

 

Security 

Security is a paramount consideration in the banking sector. Blockchain technology offers 

inherent security features, such as cryptographic encryption and immutability, which can enhance 

data protection and transaction security. However, blockchain is not immune to security threats, and 

it is vital to assess the risks associated with its implementation. Potential security risks in blockchain 

include smart contract vulnerabilities, 51% attacks (for proof-of-work blockchains), and private key 

management. The assessment should explore how these risks can be mitigated and how the use of 

blockchain can improve overall security within the Albanian banking system. 

 

Interoperability 

Interoperability is a critical factor for integrating blockchain technology into the existing 

banking infrastructure in Albania. Many blockchain solutions operate on distinct networks, and 

achieving seamless interaction with legacy banking systems is essential. Interoperability protocols 

and standards, such as Interledger Protocol (ILP) and Token Taxonomy Framework (TTF), aim to 

bridge the gap between different blockchain networks and traditional financial systems. The 

assessment should examine how these interoperability solutions can facilitate the integration of 

blockchain technology into the Albanian banking ecosystem. 

 

Advantages of using Blockchain in the Banking System 

The technical assessment of blockchain technology in the Albanian banking context must 

focus on scalability, security, and interoperability while exploring blockchain platforms and solutions 

that align with regulatory requirements and operational needs. This evaluation will inform the 

feasibility and potential benefits of adopting blockchain within the Albanian banking system. 

 Blockchain Offers Potential Benefits: The evaluation of blockchain technology indicates that 

it holds significant potential for enhancing various aspects of the Albanian banking system, 

including currency management, security, and efficiency. Its inherent features, such as 

immutability and transparency, can address existing challenges. 

 Scalability Remains a Consideration: While blockchain scalability has improved with the 

introduction of various solutions, it remains a consideration, especially for high-volume 

banking operations. Careful selection of blockchain platforms and scaling solutions is crucial 

to ensure they meet the demands of the Albanian banking sector. 

 Security Enhancement: Blockchain's cryptographic security features can enhance data 

protection and transaction security within the Albanian banking system. However, it is 

essential to be aware of potential vulnerabilities, such as those associated with smart contracts 

and private key management, and implement robust security measures. 



ENHANCING BANKING SYSTEMS THROUGH BLOCKCHAIN TECHNOLOGY: A CURRENCY 

SITUATION STUDY 

 

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 Interoperability is Key: Interoperability between blockchain networks and existing banking 

systems is critical for successful integration. Interoperability protocols and standards, such as 

ILP and TTF, should be explored to ensure seamless communication and data exchange. 

 Customization for Regulatory Compliance: Blockchain platforms like Corda, Hyperledger 

Fabric, and Ethereum Enterprise offer customization options to align with regulatory 

requirements in Albania. Tailoring blockchain solutions to meet specific regulatory standards 

is essential to ensure compliance. 

 Consider Permissioned Blockchains: Given the regulated environment of the Albanian 

banking sector, permissioned (private) blockchains or consortium networks may be more 

suitable than public blockchains. These solutions provide control and privacy while benefiting 

from blockchain technology. 

 Mitigating Risks: Implementing blockchain in the banking system should be accompanied by 

robust risk management strategies. Identifying and addressing potential risks associated with 

blockchain adoption, including regulatory compliance and cybersecurity, is crucial. 

 Pilot Projects and Regulatory Adjustments: To fully realize the benefits of blockchain 

technology, pilot projects should be initiated to test its feasibility in specific banking 

operations. Regulatory adjustments may be necessary to accommodate blockchain 

innovations while maintaining a secure and compliant financial ecosystem. 

 Collaboration and Education: Collaboration between banking institutions, regulatory 

authorities, and technology experts is essential for a successful blockchain adoption journey. 

Furthermore, continuous education and training programs can help stakeholders understand 

and harness the potential of blockchain technology effectively. 

 Long-term Vision: The adoption of blockchain technology in the Albanian banking sector 

should be viewed as a long-term strategy. As the technology continues to evolve, it is essential 

to adapt and refine blockchain solutions to meet the changing needs of the financial industry. 

 

CONCLUSIONS 

Blockchain technology offers a promising avenue for improving currency management, 

security, and efficiency within the Albanian banking system. Blockchain technology holds substantial 

promise for enhancing various facets of the Albanian banking system, including currency 

management and operational efficiency. However, scalability and interoperability remain challenges 

to address. Security measures must be robustly implemented, and customization for regulatory 

compliance is essential. Consideration of permissioned blockchains, pilot projects, and regulatory 

adjustments is prudent. Collaboration and education are key to successful adoption, emphasizing a 

long-term vision for blockchain integration in the Albanian banking sector. 

Furthermore, the potential advantages of implementing blockchain in the Albanian banking 

system extend beyond the specific focus areas mentioned. Blockchain technology can also foster 

financial inclusion, offering secure and accessible banking services in underserved regions. It has the 

potential to reduce settlement times, lower transaction costs, and minimize counterparty risks. 

Moreover, it enables efficient cross-border payments, easing international transactions for businesses 

and individuals. To fully harness these benefits, it is essential for the Albanian banking sector to 

engage in continuous research and development, staying attuned to blockchain's evolving landscape. 



Blerta LEKA (MOÇKA), Daniel LEKA, Ariet MALAJ 

 

109 

 

Embracing this technology requires a proactive approach, with financial institutions and regulatory 

bodies working together to create a supportive environment. This collaborative effort, combined with 

ongoing education and training initiatives, will empower stakeholders to make the most of blockchain 

technology's transformative potential. 

In conclusion, in spite of the challenges that arise, the incorporation of blockchain technology 

into the Albanian banking sector demonstrates substantial potential. Through the thorough scrutiny 

and proactive pursuit of the factors and opportunities outlined, Albania stands poised to establish a 

financial landscape that is not only more efficient and secure but also more inclusive. Such efforts 

harmonize with prevailing global trends within the financial industry. 

 

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2. Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). "Bitcoin: Economics, technology, 

and governance." Journal of Economic Perspectives, 29(2), 213-238. 

3. Charles, V., Emrouznejad, A. & Gherman, T. A critical analysis of the integration of blockchain 

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