The Central Bank of Armenia is finalizing a draft law to regulate the cryptocurrency market following the European MiCA (Markets in Crypto-Assets) model. This legislation aims to legalize digital asset operations through the country’s banking system, announced Central Bank Chairman Martin Galstyan during a December 10 press conference.
“We chose the European regulatory model as it aligns best with international standards, including FATF requirements for combating money laundering,” Galstyan explained. He noted that the MiCA framework is the result of three years of research and reflects modern global trends.
Addressing concerns about deterring investors with strict regulations, Galstyan emphasized that the new rules will instead create favorable conditions for compliant businesses. “Investors will be able to operate legally through Armenian banks, with clear legal solutions for any issues that arise,” he stated.
According to Galstyan, the draft law is currently under government review and will be sent to parliament after final discussions. The proposed law aims not only to protect the financial system from risks but also to establish a transparent legal framework for the development of Armenia’s cryptocurrency market.
The Central Bank’s Approach to Regulating Crypto Assets
The Central Bank of Armenia has been monitoring the virtual assets market since 2018, when it first warned the public about the risks of cryptocurrency transactions.
Over the years, the regulator has identified several key issues in this sphere, including inadequate investor protection, the interconnectedness of various crypto systems, and money-laundering risks due to transaction anonymity.
Following recommendations from international organizations such as IOSCO, FSB, IMF, BIS, and FATF, the Central Bank has begun crafting a comprehensive regulatory model. Its approach is based on the principle of “same activity, same risk, same regulation,” ensuring a level playing field for traditional and crypto financial services.
Concerns from the Web3 Community
Armenia’s Web3 community has voiced its concerns in an open letter to the government and the Central Bank, highlighting that the current policies make the country an unfavorable environment for cryptocurrency and blockchain innovation.
According to the community, Armenian banks, following informal internal policies, refuse to service startups and tech companies involved in crypto, creating significant obstacles for industry growth.
The community suggests exploring regulatory models from the UAE, Singapore, Hong Kong, and the United States, which are considered more innovation-friendly. They argue that regulating cryptocurrencies as traditional financial instruments could drive legitimate businesses to relocate to more favorable jurisdictions.
As an alternative, the Web3 community proposes establishing a special legal status for cryptocurrencies and simplifying procedures for crypto exchanges. Such measures could attract major international companies and investments to Armenia.
