Azerbaijan is moving to bring crypto firms firmly under the authority of its central bank, unveiling a draft law that would require all virtual-asset service providers operating in the domestic market to obtain licences from the Central Bank of Azerbaijan.
The draft has been completed and submitted for review, and the central bank expects the legislation to be adopted before the end of the year. Fidan Tofidi, director of the Central Bank’s Financial Technologies and Innovation Department, said the proposal would place licensed firms under continuous central-bank supervision and require them to meet strict regulatory standards. Businesses would also be obliged to follow anti-money laundering and counter-terrorism financing measures, including mandatory customer identification.
Tofidi framed the proposal as part of Azerbaijan’s broader financial market development strategy for 2027–2030, which the regulator says is being designed using real data. She emphasized that safeguarding the stability of the country’s financial system is a core priority driving the move.
If passed, the law would make a central-bank licence mandatory for any company offering virtual-asset services to customers inside Azerbaijan; firms without regulatory approval would be barred from operating in the domestic market. That will likely force international exchanges and local startups alike to seek authorisation or withdraw services for Azerbaijani users.
Azerbaijan’s push to regulate crypto comes alongside a cautious stance on central bank digital currencies (CBDCs). Central Bank Governor Taleh Kazimov has said there are no immediate plans to issue a CBDC, noting regulators want to study potential effects on monetary policy and financial stability and that no fully successful CBDC model has yet emerged globally—most remain pilots.
The central bank has also been in talks with industry players: Olga Goncharova, Binance’s director for government relations in the CIS, revealed discussions with the Central Bank of Azerbaijan on potential cooperation to develop regulation mechanisms for the country’s crypto market.
Next steps: the draft will undergo review and, if adopted as expected before year-end, will mark a significant regulatory tightening for crypto services in Azerbaijan, shaping how exchanges, custodians and other virtual-asset firms operate in the market.
Read more AI-generated news on: undefined/news
