Similar centralised solutions also exist for the settlement of foreign exchange and securities transactions. Society could possibly benefit greatly from replacing the existing infrastructure with more decentralised solutions, for instance based on so-called Blockchain technology. Such solutions were first used when the digital currency Bitcoin came onto the market in 2009. Such freestanding digital currencies face a series of challenges, such as significant price volatility, safety issues and pressures on IT resources. Experience shows that the public can easily lose confidence in such currencies and their payment systems, which are not backed by a central bank or a government deposit insurance scheme. Recently, the international debate has shifted focus away from freestanding digital currencies to other uses and the underlying technology. Decentralised systems are peer-to-peer networks where transactions are made directly between participants. They each have an identical copy of the account system or ledger, which is updated continuously. As the ledger is distributed among incumbents, central operators or intermediaries are not needed to undertake the operations. This also provides potential for faster and cheaper settlement. Public confidence and safety rely on encryption. It should not be possible to manipulate the ledger and transactions, and funds cannot be used more than once. It goes without saying that the quality of the security solutions is absolutely essential. The decentralised technology can potentially be used in many areas. Besides the financial sector, proposed uses include registration of property and objects of value and in elections.

The Bank of Albania is very heedful to external balances of the Albanian economy, regarding their correction as one of the main priorities of the country’s macroeconomic policies. This objective assumes more importance against the backdrop of recent developments in global financial markets. In the long run, its attainment requires ongoing structural reforms, which will enhance competitiveness of the Albanian economy and will generate higher revenues from the export of goods and services. Monetary inflationary pressures remain subdued in the medium run. Monetary expansion has maintained stable annual growth rates during the year, resulting 10.4% in September. Public sector demand for funding has been downward in recent months, making the private sector’s demand provide the largest contribution to money supply growth. Private sector credit grew 14.0% in September, marking a slight acceleration compared with the first half of the year. However, as we have constantly stated, the relatively sluggish performance of private sector credit reflects mostly its weak demand. The banking sector appears liquid and well capitalized to credit the Albanian economy, but it has increased its prudence in terms of lending, thus reflecting the new reality of the Albanian economy and global financial markets. The Bank of Albania assesses that, within the parameters of prudence, there is room for a more rapid growth of credit and for supporting sound investment projects by the banking sector. On our behalf, we will continue to support the financial system with liquidity and monetary stimuli in order to boost lending.