Armenia adopts crypto oversight law amid industry backlash

By Alexander Pracht

The Armenian parliament adopted a long-awaited bill regulating the cryptoasset sector last Thursday, drawing sharp criticism from industry representatives. Officials from the Central Bank and the Ministry of Finance strongly defended the bill, mentioning civil protection and stressing that Armenia is striving to align its legislation with European Union standards.

The law establishes operational rules for companies involved in crypto trading and investment. According to Central Bank Deputy Chairman Armen Nurbekyan, regulatory requirements will depend on the type of service provided. Thus, companies offering crypto investment advice will face lighter oversight, while those operating exchanges or issuing stablecoins (tokens pegged to other assets) will be more tightly controlled.

Nurbekyan emphasized that the Central Bank will enforce particularly strict supervision wherever client funds are involved.

Additionally, while the original draft allowed banks to offer crypto services simply with Central Bank approval, the final version mandates that banks must establish a separate licensed entity to do so.

In an interview with CivilNet, Eduard Avetisyan, the founder of Bitcoin Armenia, a crypto exchange network, warned that Armenia is introducing “some of the harshest crypto regulations,” which he believes will lead to the “de facto elimination” of the industry. 

“The Central Bank has been putting severe pressure on the sector ever since 2018. It has advised banks, businesses, and the public to stay away from crypto,” Avetisyan said, noting that the measures are essentially a shadow ban for the industry. “In other words, companies that operate within legal limits, act strictly according to the law, and are registered with the tax authorities somehow cannot have a bank account, cannot use basic financial instruments, and therefore cannot expand,” he explained.

According to Avetisyan, the new licensing regime resembles banking-level regulation, requiring high-cost compliance measures such as minimum capital thresholds, office space, and audits.

In response, Central Bank Deputy Chairman Armen Nurbekyan said that the legislation is largely based on the European Union’s Markets in Crypto Assets (MiCA) framework and focuses on regulating the financial, not technological, side of the industry.

Nurbekyan argued in a separate interview with CivilNet that the Central Bank never prohibited banks from working with crypto companies. Instead, he said, banks were merely warned about the sector’s high risks and made their own decisions on whether to offer services.

“Based on that advisory, some banks chose not to open accounts, but others did, and we’ve seen notable activity within the banking system,” Nurbekyan said.

He added that the best thing regulators can do for the sector’s institutional development is to create a clear and understandable framework, one that does not allow questionable players to enter the Armenian market.

Despite officials’ claims that the new law focuses on safeguarding investments, the country’s then-deputy interior minister Arpine Sargsyan said last October that the bill aimed to combat cybercrime. She noted that banks and other organizations will have time to prepare for the upcoming changes, the new regulation coming into effect on January 1, 2026.