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The disappearance of cash in Albania, is Rama directing investments in the construction sector?!

2025-07-19 12:27:29Biznes SHKRUAR NGA KLODIAN TOMORRI
Tirana

By Klodian Tomorri

Prime Minister Edi Rama announced a surprise initiative the other day, which surprised quite a few people. The head of government declared that within 5 years, Albania will no longer have cash.

"We have another ambition that by the end of this decade Albania will be 'cashless', meaning that all interactions and all financial transactions will be digital. For this we need a great effort, we need a lot of awareness. Technology is not lacking. I believe that, if we know how to draw the road properly and know how to walk according to it, this is feasible and will free the country from a great burden of dust and thorns in all daily life", - said Prime Minister Edi Rama.

Currently, there is no economy in the world that has completely eliminated physical money from circulation. Sweden, which is the most advanced country in this regard, has halved the use of cash in the economy between 2007 and 2024, without any decision or law. However, Sweden has not completely eliminated cash from circulation either, and is even returning to it this year.

In an exclusive interview with The Banker in March this year, Sweden’s central bank governor, Erik Thedéen, said the country’s banking industry must act quickly to help protect physical money and expand cash payments. “We need to think about sustainability now ,” Thedéen said. “ If everything breaks down, we [need] to have cash. ”

As one of the world’s least cash-intensive societies, Sweden’s advanced digital payments infrastructure leaves the country increasingly vulnerable to cyberattacks and could pose additional risks during crises such as “wartime,” the central bank governor said. So, when the planet’s most advanced countries find it impossible to transition to a cashless economy, what is Edi Rama planning?

First of all, the answer to this question may be related to the consequences of the message conveyed to the market.

When a country's government says it will eliminate cash from the economy within 5 years, those who have large stacks and rooms of cash will rush to spend them or put them into the system. In a country with massive economic informality, high crime rates, and rampant corruption, the stacks and warehouses of cash must be countless.

All those who have this money will now rush to invest it in real estate or businesses. Because in 2030 they will no longer be worth it. In short, the direct economic impact of the prime minister's call will be an increase in investment and consumption in the economy. Criminal organizations, corrupt individuals and those who have evaded taxes now have a direct incentive to spend the money they keep under their pillows.

One of the sectors that will have the highest flow of these expenses is certainly construction, but not only that. This naturally raises the question: was this Edi Rama's intention when he announced the initiative to eliminate cash?

Recent developments in the construction sector are contradictory. Although prices have continued to rise, there are rumors in the market that demand is cooling. In parallel, many of Tirana's giant towers have remained mere paper projects, jeopardizing Edi Rama's pharaonic dream of giving Tirana the look he has in mind. Is the cooling of the residential sector or the economy as a whole one of the reasons why Edi Rama launched the sudden initiative of Albania without physical money?

If the government and the prime minister continue to reinforce the message of the disappearance of cash by 2030 and act in this direction, what will happen is a massive pumping of dirty money into the real economy, supplying the economy with a new source of financing. A kind of de facto amnesty, although not guaranteed by law.

So, economically, what Edi Rama did the other day has these consequences. Was this the prime minister's intention? We will find out later. But every now and then, the corrupt, the traffickers, the evasors and all those who have tons of cash are being invited to find their place.


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