The Postal Savings Bank of Serbia has opened four bank branches, at the Jarinje, Bernjak, Konculj and Merdare border crossings, where it says Kosovo Serbs can withdraw payments from the Serbian government, such as salaries and pensions, in dinars.

According to the bank’s announcement, each store is equipped with a Postal Savings Bank ATM, where it will be possible to withdraw money from dinar accounts at any time.

“To support the citizens, the bank has sent two mobile branches that will be available at the said points depending on the needs of the citizens,” the statement said.

It adds that “this technical solution is temporary until the normal functioning of payment transactions in the Serbian areas of Kosovo is established.”

On February 1, the Central Bank of Kosovo, an entity independent of the government, implemented a regulation which stipulates that the euro is the sole currency for payment transactions in the country. This follows from the fact that the euro has been the official currency of the country since 2002 and from the 2008 Constitution which states that there is only one legal currency.

However, many Kosovo Serbs, who refuse to accept Kosovo’s declaration of independence in 2008, they continue to use the dinar, avoiding the euro.

Other currencies, including dollars, pounds, lek and dinar, will continue to be allowed in exchanges, special foreign exchange accounts and in informal transactions between individuals.

However, all official payments must be made in dinars, which prevents large amounts of cash from being brought into Kosovo from the border and subsequently raises concerns about organized crime and the traceability of funds.

In the last month, the Kosovo Police banned the entry of physical dinars from Serbia on several occasions, arguing that this is prohibited by Central Bank rules.

Meanwhile, in an effort to allow Kosovo Serbs to adjust, the Kosovo government imposed a three-month transition period for the rules to take effect.

Kosovo Prime Minister Albin Kurti clarified that the dinar is not banned, despite Serbia’s claims and many media inaccuracies, and encouraged Serbs to join the country’s banking system.

He even said that the central bank has offered the People’s Bank of Serbia facilities to convert dinars into euros and has secured free euro bank accounts for every Kosovo Serb. The dinars can be paid into these accounts and then withdrawn in euros, the official legal tender, the government said.

“Aid to the Serbian community, which is sent by the government in Belgrade, is received in euros and registered through the bank account can be received for transparency and legality. In this way, the amount of money sent from Belgrade will correspond exactly with the money you receive in Kosovo,” he said in mid-February.

At the United Nations Security Council meeting in February, Kurti also responded to Serbian President Aleksander Vucic’s claims that the “ban” was an attempt at ethnic cleansing.

“The central bank regulation does not prohibit Serbia from providing financial support. Any claim to the contrary is false propaganda aimed at inciting ethnic tensions.”

The prime minister continued that the decision to regulate the way foreign currency enters the country is in line with national legislation and best international and European practices to prevent financial crime. He said he would stop illicit funds from being physically transported across Kosovo’s borders and used by criminal structures.

“Belgrade’s hysteria over central bank regulation it stems from the imminent cessation of illegal cash flow into Kosovo and not from concerns for the welfare of Serbian citizens,” he added.

The decision by Kosovo’s central bank has drawn the ire of the European Union and the US, which have called for it to be suspended, fearing it will exacerbate already fragile ethnic tensions.

The US envoy for the Western Balkans, Gabriel Escobar, will be in Pristina this week to discuss the ongoing dialogue with Serbia and the dinar issue.

The State Department said: “His visit will reiterate the commitment of the United States to the countries of the Western Balkans, which are aiming for Euro-Atlantic integration and deeper regional cooperation.”

Last month, Escobar said that the Kosovo government does not treat the US as a partner because it did not listen to the US request on the issue of the Serbian dinar.

“We are very worried because the government of Kosovo does not treat us as a partner, it does not cooperate with us on regional stability and undermines the dialogue, a process in which the US is fully committed,” said Escobar.