Legislative innovations on the regulation of cryptocurrency companies in Armenia
At present, the activities of licensed or authorized cryptocurrency companies in RA are not regulated. However, there is a legislative draft concerning crypto assets, which outlines the following key points:
- Definition of Crypto Assets: Crypto assets are defined as property based on encryption (cryptography), which holds value or certifies a right and can be transferred and stored exclusively in electronic form using Decentralized Registry Technology (DRT).
- Licensing Requirement: The draft legislation stipulates that companies wishing to provide services involving crypto assets must obtain a license. This requirement is mandatory
- Opportunity to register a branch of a non-resident company: The draft provides the opportunity and procedure of registration of a branch or representative office of a non-resident/ foreign company providing services on crypto assets
Services with crypto assets are considered by a person՝
- launch of a platform for trading crypto assets;
- storage of crypto assets;
- purchase and sale of crypto assets at your expense;
- the purchase and sale of crypto assets at the expense of the client;
- acceptance and transfer of orders for transactions with crypto assets;
- distribution of crypto assets;
- management of crypto asset packages;
- providing crypto assets related consultation;
- transfer of crypto assets;
- issue of tokens attached to the crypto asset:
It is also important to note that cryptocurrency is not yet recognized as a method of payment in RA and the draft also does not contain provisions regarding its value as a payment method.
Although the Central Bank of Armenia does not prohibit cryptocurrency payments, it regards them as undesirable. In contrast, most banks in RA prohibit any financial operations involving cryptocurrencies and do not open bank accounts for cryptocurrency transactions.
However, it should be emphasized that the aforementioned points are part of a legislative draft that currently has no legal force.