Armenia takes its first steps towards the regulation of the cryptography sector, with the adoption of a new law on cryptographic assets as well as a set of amendments to existing legislation, said on February 27 of the Prime Minister’s office.
The Minister of Finance, Vahe Hovhannisan, said on February 27 that legislative changes “will allow the crypto-active sector to create a foreseeable environment with clearly defined rights and responsibilities of operators, sufficient mechanisms to protect the interests of customers and transparent market operations”, according to a press release on its Facebook page.
Hovhannisyan added that the volume of cryptographic transactions increases, public participation in the sector has increased significantly, both in the world and in Armenia, Arminfo reported. However, so far, the absence of a legal framework has led to various problems, including challenges in the provision of services related to crypto, regulatory cooperation and the establishment of stable relations with customers and investors.
The Minister has highlighted the multiple risks associated with the sector, in particular inadequate consumer protection mechanisms and concerns concerning the potential improper use of cryptographic assets for money laundering and terrorist funding. In addition, the continuous expansion of cryptographic transactions presents risks of financial stability. Low regulatory responses to these threats have hampered the development of the sector, which makes it difficult to attract them from customers, provides high quality services and allow investments in newly issued cryptographic assets. In addition, concerns about illicit activities have limited the integration of the cryptographic ecosystem with the wider financial system.
Recognizing the urgency of meeting these challenges, the government aims to implement a complete regulatory model which will support the development of the sector while attenuating existing and potential risks.
“The regulations will allow the formation of a clear legal framework. At the same time, effective mechanisms to protect the interests of customers will be created, “said the Prime Minister’s office.
Once adopted, the framework will introduce well-defined legal parameters for cryptographic assets and their underlying technologies. It will also create favorable conditions for sectoral innovation, in particular in distributed big book technologies, and will establish clear rules for market players. This approach aims to promote long -term planning of crypto -related activities in Armenia and to attract international actors in the sector, said Hovhannisyan, as Arminfo reported.
The regulations will introduce solid consumer protection measures, including mechanisms to prevent conflicts of interest, complaint processing procedures, guarantees for customer funds and transparency requirements. Customers will have access to professional services, essential decision -making information, financial services and other legal protections.
As part of the new regulatory framework, the Central Bank of Armenia will have improved surveillance powers to monitor sector activities, respond to financial stability problems, money laundering and terrorist financing and collaborate with international regulatory organizations. This initiative should strengthen Armenia’s reputation in the world’s financial markets.
