Cryptocurrency Regulation in Armenia Prior to 2023

In the period leading up to 2023, Armenia’s approach to the regulation of cryptocurrencies was characterized by a lack of specific legal frameworks, yet with an openness to the use and trading of digital currencies. This stance represented a cautious yet non-restrictive approach to an increasingly digital financial world.

The Legal Status of Cryptocurrencies

As of the time leading up to 2023, cryptocurrencies in Armenia were not considered legal tender. This meant that digital currencies were not officially recognized by the government as a medium of exchange for goods and services. Despite this, the use, trading, and mining of cryptocurrencies were not deemed illegal. This situation indicated that while the Armenian government did not officially endorse cryptocurrencies, they also did not prohibit their use. This open stance allowed for the growth and development of the cryptocurrency sector within the country without the hindrance of strict governmental controls or regulations​​.

Absence of Specific Cryptocurrency Regulations

One of the key aspects of Armenia’s legislative landscape regarding cryptocurrencies was the absence of specific regulations. Although cryptocurrencies were neither illegal nor endorsed as legal tender, there were no dedicated laws or regulations governing their use. This lack of specific legislation meant that cryptocurrencies existed in a somewhat grey area in terms of legal status. However, it’s noteworthy that the Armenian government had shown interest in developing a legal framework for digital currencies. In 2018, a bill was introduced with the aim of regulating cryptocurrencies and initial coin offerings (ICOs), but as of the period under review, this bill had not been passed. The situation underscored that while there was an acknowledgment of the need for regulation, the actual implementation of such a legal framework was still in progress​​.

Penalties and Enforcement Mechanisms

Given the absence of specific regulations for cryptocurrencies, there were no distinct penalties or enforcement mechanisms related to their use in Armenia. However, it’s important to note that, like any other financial transactions, cryptocurrency transactions were subject to general financial laws and regulations. Activities involving cryptocurrencies that were deemed illegal, such as fraud or money laundering, were punishable under Armenian law. This approach reflected a balance between allowing the operation of cryptocurrencies and ensuring that their use did not facilitate illegal activities​​.

Conclusion

Prior to 2023, Armenia’s approach to cryptocurrency regulation was characterized by a notable absence of specific laws governing digital currencies. This approach allowed for a level of flexibility and growth in the sector, albeit with an underlying caution due to the lack of formal legal status for cryptocurrencies. The government’s interest in eventually establishing a regulatory framework suggested an awareness of the growing importance of digital currencies and the need for more structured oversight in the future.