YEREVAN, April 14. The new Law on Crypto Assets is poised to be the cornerstone of cryptocurrency regulation in Armenia, according to Armen Nurbekyan, Deputy Chairman of the Central Bank. He presented the draft law along with related legislative measures during a special session of the parliamentary committee focused on financial, credit, and budgetary matters.
Nurbekyan highlighted that the advancement in this sector brings significant benefits for consumers, particularly by making a range of financial services more accessible and operational around the clock. However, he also pointed out that these innovations come with potential risks, particularly concerning consumer protection and the threat of money laundering.
“Our regulatory aim is to strike a balance between fostering growth in this domain in Armenia while ensuring that any associated risks remain manageable,” Nurbekyan stated, clarifying that the Central Bank’s focus is on regulating the financial services landscape rather than the technological aspects.
The Central Bank’s approach draws on European Union practices, adhering to the principle of “one action, one risk, one regulation.” The proposed legislation is modeled after the EU’s Markets in Crypto-Assets Regulation (MiCA), which clearly states that crypto assets are not to be considered as a payment method and will be subject to regulatory oversight.
Nurbekyan highlighted that the proposed legislation mandates issuers to release a public offering document, commonly known as a White Paper, to ensure consumers fully grasp the issue’s terms and rationale. He emphasized that only legal entities holding a license from the Central Bank will be authorized to offer services, enumerating ten specific services eligible for licensing.
These services include establishing a trading platform, safeguarding crypto assets, issuing tokens (including stablecoins) linked to an asset, buying and selling crypto assets on their own behalf, conducting purchases and sales of crypto assets on behalf of clients, facilitating order acceptance and transmission for crypto transactions, placing crypto assets, managing crypto asset portfolios, providing consulting on crypto assets, and transferring crypto assets.
The Deputy Chairman of the Central Bank pointed out that various requirements apply to these services, including minimum market entry thresholds and capital requirements. “We adhere to what are termed ‘hygiene rules’ concerning the individuals providing these services, such as managers and major stakeholders, to ensure that those who might harm the financial sector and its overall reputation do not enter the market,” he clarified.
Moreover, Nurbekyan mentioned that provisions are being put in place to enhance reporting regarding the safeguarding of client funds and to prevent malpractices in the crypto asset marketplace. Specifically, client funds will not be subject to seizure for covering the debts of the crypto service provider, and providers will be prohibited from using clients’ funds for personal advantage.
As outlined in the draft law, crypto asset service providers will need to maintain distinct records for each client and their own funds. They will also be obligated to submit regular reports to both the Central Bank and their clients.
The committee has given a favorable review of the draft law and has recommended including this legislative package in the agenda for the upcoming parliamentary session.-0-
