Armenia: A New Era of Cryptocurrency Regulation

Last year, partial regulation of the cryptocurrency market was introduced in Armenia: exchangers were given the right to operate only in a non-cash format, which allowed them to strengthen control over their turnover. However, now the government has adopted a complete set of rules that will significantly change the legal framework for the crypto business in the country.

As the head of the Central Bank of Armenia, Martin Galstyan, explained, regulators are not focused on the technological component of cryptocurrencies, but on the financial aspects of their circulation. One of the key requirements is that entities issuing or trading crypto assets undergo so-called «financial hygiene.» This means mandatory reporting to the Central Bank on company owners, as well as setting a minimum capital threshold.

On the other hand, the government seeks to support the development of the crypto industry by simplifying the procedures for issuing crypto assets (ICO) compared to a traditional IPO (placement of shares or bonds). This solution is aimed at reducing the risks associated with the lack of regulation in this area. Currently, the same entity can simultaneously issue and trade cryptocurrencies, thereby creating opportunities for exchange rate manipulation through speculative transactions. In addition, borrowed funds are often used without sufficient guarantees of repayment, which carries systemic risks for the economy. Until now, there were no control mechanisms over the founders of crypto companies, which could lead to the risks of money laundering and other financial crimes.

Armenian Finance Minister Vahe Hovhannisyan noted that thanks to the new legislation, a transparent and predictable business environment is being created. The new regulatory rules will provide entrepreneurs with clear rights and responsibilities, guarantee the safety of users and increase the transparency of financial transactions. He also stressed that these measures will make Armenia attractive to international players in the cryptocurrency market, which will lead to the development of the industry and provide users with professional financial services.