Crypto Regulation Bill: Objectives and Perspectives

Increasing Public Involvement and Business Activity

Public Involvement: The rise in the use and circulation of cryptoassets has significantly increased public engagement in this field globally and in Armenia, in particular.

Business Growth: Blockchain and other distributed ledger technologies (DLT) have seen a surge in business activity, promoting innovation and economic growth.

Addressing Regulatory Gaps

Innovation and Investment: The lack of regulation has been a barrier to further innovations and investments in the cryptoassets sector.

Risk Management: The absence of regulation poses such risks as inadequate customer protection and vulnerabilities to money laundering and terrorism financing.

Enhancing Integration and Cooperation

Financial System Integration: Current unregulated conditions hinder the seamless integration of the crypto ecosystem with the traditional financial system.

International Cooperation: Regulation is necessary to ensure that Armenia's crypto market can interact effectively with global financial systems and standards.

Key Provisions of the New Regulation

Regulation and Licensing

Public Offering and Trading: The bill proposes regulations for the public offering and trading of cryptoassets to ensure transparency and fair practices.

Service Providers: Licensing requirements will be established for entities providing services related to cryptoassets to ensure they meet specific standards and qualifications.

Protection Mechanisms

Reserve Assets and Customer Funds: Mechanisms will be introduced to protect reserve assets and customer funds, ensuring financial stability and trust.

Market Abuse Prevention: Measures will be in place to prevent abuses in the cryptoassets market, promoting a fair and orderly market environment.

Combating Illicit Activities

Money Laundering and Terrorism Financing: The bill includes measures to combat money laundering and terrorism financing, aligning with international standards to mitigate these risks.

The Role of the Central Bank

Regulatory and Supervisory Powers

The Central Bank's Role: The Central Bank of Armenia will be empowered to regulate and supervise the cryptoassets market, ensuring compliance and stability.

International Standards: The Central Bank will follow international standards and collaborate with relevant organizations to maintain global compliance and integrity.

Expected Outcomes

Market Development

Stable Development: The law will promote the long-term and stable development of the cryptoassets market in Armenia, fostering a conducive environment for growth.

New Opportunities: Investors and customers will benefit from new opportunities, and international partners will be more inclined to engage with Armenia's crypto market.

Economic Growth

Innovative Projects: The regulation will create favourable conditions for innovative projects, driving economic development in Armenia.

International Involvement: Ensuring international compliance will attract global investors and partners, enhancing Armenia’s position in the global crypto market.