Azerbaijan proposes crypto licensing framework
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- Azerbaijan has proposed a new law requiring all cryptocurrency businesses to obtain a central bank licence before operating domestically.
- Licensed firms would be subject to ongoing supervision and required to comply with anti-money laundering and customer identification rules.
- The proposal forms part of the country's financial market strategy while Azerbaijan continues to delay plans for a central bank digital currency.
Azerbaijan has proposed legislation requiring all cryptocurrency businesses to obtain a licence from the Central Bank of Azerbaijan before providing virtual asset services in the domestic market.
The draft law would introduce a formal licensing regime as the country continues developing its cryptocurrency regulatory framework while maintaining a cautious approach towards central bank digital currencies.
“The legislation is part of Azerbaijan’s financial market development strategy for 2027 to 2030,” said Central Bank of Azerbaijan Financial Technologies and Innovation Department Director Fidan Tofidi.
Under the proposal, licensed firms would remain under ongoing central bank supervision and be required to comply with anti-money laundering, counter-terrorism financing and mandatory customer identification requirements before offering cryptocurrency services.
The legislation would prohibit unlicensed companies from operating in Azerbaijan if approved, while as the proposal relates to government regulation there was no share price reaction.
The proposal follows comments by Central Bank of Azerbaijan Governor Taleh Kazimov last year that the country had no immediate plans to introduce a central bank digital currency because officials wanted to assess the impact on monetary policy and financial stability.
The regulatory framework also follows discussions between Binance and the Central Bank of Azerbaijan on possible cooperation to develop cryptocurrency market regulations, reflecting the country's broader effort to establish rules for digital asset businesses.