Azerbaijan Mandates Central Bank Licences for Crypto Firms

Azerbaijan has finished drafting a law to regulate virtual assets and sent it for review. The Central Bank expects adoption before the end of the year.

Every company handling crypto assets would need a licence from the central bank before operating in the domestic market, said Fidan Tofidi, director of the Financial Technologies and Innovation Department at the Central Bank of Azerbaijan.

Licensed firms would face strict regulatory standards and continuous central bank supervision. Tofidi said businesses would also have to follow anti-money laundering and counter-terrorism financing rules, including mandatory customer identification.

The central bank sees the legislation as part of Azerbaijan's financial market development strategy for 2027 to 2030, which is being built using real data, Tofidi said. Protecting financial system stability remains a main priority, she added.

Once approved, the law would make a central bank licence mandatory for all crypto-related businesses serving Azerbaijan's domestic market. Companies without regulatory approval could not provide virtual asset services inside the country.

The proposal arrives as Azerbaijan builds its digital asset regulatory framework while staying cautious 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. Officials wanted to study the impact of such projects on monetary policy and financial stability first, he explained.

Kazimov also said the central bank had not identified any fully successful CBDC implementation globally, noting 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.