In recent years, cryptocurrencies and financial technologies (fintech) have seen significant global expansion, and Armenia has not remained untouched by these dynamic developments. These technologies offer new opportunities for investment, payments, financial services, and increasing business efficiency. However, their rapid growth has also raised legal and regulatory challenges.
In this article, we will explore what is currently legal and what is not in the Republic of Armenia in the context of cryptocurrencies and financial technologies.
What Are Cryptocurrency and Financial Technologies?
Cryptocurrency is a digital or virtual currency based on blockchain technology that is not controlled by a central bank or any government authority. The most well-known cryptocurrencies include Bitcoin, Ethereum, Ripple, and others.
Financial technologies (fintech) are technological solutions applied in the financial services sector, including banking, payments, investments, lending, insurance, and more. Fintech encompasses the use of cryptocurrencies as well as payment systems, robo-advisors, crowdfunding platforms, digital wallets, and other innovative services.
The Legal Status of Cryptocurrencies in Armenia
Currently, cryptocurrencies do not have a clearly defined legal status in Armenia. However, several key points can be highlighted:
1. Legality
The purchase, sale, and holding of cryptocurrencies are legal for both individuals and legal entities. This means that citizens are allowed to buy, hold, and sell cryptocurrencies without facing administrative or criminal liability.
2. Taxation
The Tax Code of Armenia does not yet provide specific regulations for taxing income from cryptocurrencies. However, in 2021, the State Revenue Committee (SRC) announced that profits from the sale of cryptocurrencies may be subject to income tax under general taxation principles.
3. Regulatory Framework
Currently, there is no separate licensing requirement for blockchain or crypto-related activities in Armenia. However, if a business offers services related to the management or exchange of crypto assets, it must comply with general financial regulations, including Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
Financial Technologies in Armenia: Legislative and Regulatory Environment
Financial technologies in Armenia are developing in several key directions:
1. Digital Payment Systems
In recent years, there has been significant growth in digital payment systems in Armenia. Banks and various organizations have introduced innovative platforms such as QR code payments, mobile apps, and other digital solutions.
This activity is fully regulated by the Central Bank of Armenia. Banks and payment service providers must hold the appropriate licenses to operate.
2. Peer-to-Peer Lending and Crowdfunding
Armenia currently lacks clear regulation for online peer-to-peer (P2P) lending between individuals and investment crowdfunding platforms. While there have been some attempts to attract investments through such platforms, legal uncertainty in this area still persists.
3. Robo-Advisors and Algorithmic Investing
At present, robo-advisors are not widely used in Armenia. This is partly due to the fact that investment activities are subject to complex regulation and require proper licensing, which can limit the adoption of automated investment tools.
AML/KYC Requirements and International Obligations
The Central Bank of Armenia is a member of several international financial regulatory organizations, including cooperation with the Financial Action Task Force (FATF). According to the requirements of such organizations:
- All entities providing financial services must implement Know Your Customer (KYC) procedures and Anti-Money Laundering (AML) mechanisms for identifying clients and reporting suspicious transactions.
- These same requirements may also apply to crypto platforms if they manage or exchange customer assets.
In this context, if you are launching a crypto or fintech startup, it is essential to assess whether your activities qualify as financial services and whether they are subject to licensing.
Government Approach and Development Strategies
In recent years, the Government of Armenia and the Central Bank have shown openness to supporting the development of financial technologies.
However, regulation is still in the development phase, and it is expected that in the coming years, the Central Bank and the government will introduce new laws aimed at fostering innovative financial services.
What Is Legal and What Is Not
| Activity | Legal Status |
| Right to buy and hold cryptocurrency | ✔️ Legal |
| Earning income from selling cryptocurrency | ✔️ Legal, but taxation is complex |
| Operating a crypto platform without a license | ⚠️ Not explicitly prohibited, but AML/KYC requirements may apply |
| Fintech payment services | ✔️ Legal with Central Bank licensing |
| P2P lending / Crowdfunding platforms | ⚠️ Legally unregulated sector |
| Issuing personal loans without a license | ❌ May be considered illegal financial activity if done regularly |
Conclusion
Cryptocurrencies and financial technologies are still emerging sectors in Armenia. Despite legislative gaps and regulatory uncertainties, the overall trend is positive. Government institutions are open to innovation but remain cautious due to the potential risks of money laundering and financial fraud.
Businesses and individuals looking to engage in this sector should carefully follow:
- The Central Bank of Armenia’s definitions and regulations regarding financial activity,
- The tax code in terms of reporting profits,
- International AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements.
Until comprehensive legal frameworks are in place, it is strongly recommended to consult a lawyer in advance.
