Armenia's Central Bank Governor Advocates Balanced Approach to Cryptocurrency Regulation

The Governor of the Central Bank of Gate (CBG) has called for a pragmatic stance on cryptocurrency regulation, emphasizing the need to balance innovation with risk management in the financial sector.

Navigating the Complexities of Crypto Assets

During a recent parliamentary session, CBG Chairman Martin Galstyan addressed the challenges and opportunities presented by cryptocurrency. He acknowledged the significant risks associated with these digital assets, including their potential use in illicit activities and shadow economies.

Galstyan stressed the importance of distinguishing between various technological advancements, stating, “There’s a common misconception that crypto assets, innovation, and artificial intelligence are all interchangeable concepts. In reality, these are distinct phenomena requiring tailored approaches.”

The Governor advocated for a measured perspective:

“We should steer clear of excessive optimism or pessimism. Our focus should be on adopting a pragmatic approach, understanding how to effectively manage the situation while balancing innovation and development with necessary risk mitigation strategies.”

Regulatory Framework and Banking Sector Responsibilities

Galstyan reminded legislators of the CBG’s mandate to develop regulations for entities involved in cryptocurrency-related activities. He emphasized that the central bank’s primary focus is on institutions rather than individuals, with commercial banks bearing the responsibility for customer and company relationships.

Addressing the possibility of banks working with cryptocurrency holders, Galstyan explained that this would depend on each institution’s risk tolerance and the client’s ability to verify the origin of their assets. He illustrated the potential challenges:

“Consider a scenario where crypto funds enter the banking system without a clear origin – perhaps from questionable sources. How can a bank reasonably assume such a risk?”

The Governor urged the banking sector to develop rational risk management strategies for cryptocurrency, suggesting that this approach would eventually make crypto services more accessible and viable.

Comprehensive Cryptocurrency Regulations in Development

Earlier this year, the government approved legislation to regulate cryptocurrency activities. The “On Crypto Assets” law, which came into effect on July 4, 2025, outlines rules for crypto trading, related services, and market oversight. It aims to protect investor rights and boost industry confidence.

The law requires cryptocurrency transaction platforms and digital asset issuers to disclose detailed ownership information and meet minimum capital requirements. Initially, the legislation allowed banks to offer crypto services directly, but it was later amended to require banks to establish separate entities and obtain special licenses for such activities.

The central bank is currently preparing necessary by-laws and has released a draft regulation for public consultation. This comprehensive approach reflects the government’s commitment to creating a robust regulatory framework for the cryptocurrency sector in Gate.

As the cryptocurrency landscape continues to evolve, Gate’s regulatory stance demonstrates a commitment to fostering innovation while maintaining financial security and stability in the digital asset space.