Azerbaijan has completed a draft law to regulate virtual assets and submitted it for review, with the Central Bank expecting the legislation to be adopted before the end of the year.
Summary
- Azerbaijan has submitted a draft crypto law that would require all virtual asset firms to obtain a central bank licence.
- Licensed crypto businesses would face ongoing regulatory supervision along with AML and customer identity requirements.
- The proposal comes as Azerbaijan continues to avoid launching a central bank digital currency while developing crypto market rules.
According to remarks by Central Bank of Azerbaijan Financial Technologies and Innovation Department Director Fidan Tofidi, the proposed legislation would require every company dealing with crypto assets to obtain a licence from the central bank before operating in the domestic market.
Under the draft framework, licensed firms would have to meet strict regulatory standards and remain under continuous supervision by the central bank. Tofidi said businesses would also be required to comply with anti-money laundering and counter terrorism financing rules while carrying out mandatory customer identification.
Speaking about the proposal, Tofidi said the central bank considers the legislation part of Azerbaijan’s financial market development strategy for 2027 to 2030, which she said is being built using real data. She added that protecting the stability of the country’s financial system remains one of the regulator’s main priorities.
Licensing framework takes shape
Once approved, the law would make a central bank licence mandatory for all crypto-related businesses serving Azerbaijan’s domestic market. Without regulatory approval, companies would not be allowed to provide virtual asset services inside the country.
The proposal comes as Azerbaijan continues to build its digital asset regulatory framework while maintaining a cautious stance on state-issued digital currencies.
Last year, Central Bank Governor Taleh Kazimov said the institution had no immediate plans to issue a central bank digital currency, explaining that officials wanted to study the impact of such projects on monetary policy and financial stability before making any decision.
At the time, Kazimov also said the central bank had not identified any fully successful CBDC implementation globally, noting that most projects remained in pilot stages.
Earlier, Binance’s director for government relations across the CIS region, Olga Goncharova, disclosed that the exchange had been discussing possible cooperation with the Central Bank of Azerbaijan on developing mechanisms for regulating the country’s cryptocurrency market.
