Adoption of law on cryptocurrencies in Azerbaijan may take long time

Business Materials 8 February 2018 20:55 (UTC +04:00)

Baku, Azerbaijan, Feb. 8

By Anvar Mammadov – Trend:

The bill "On the regulation of trade in cryptocurrencies", which is being developed, has raised a number of issues, a source in the Azerbaijani financial market told Trend Feb. 8.

According to the source, the bill itself has been drafted very competently and qualitatively and the topic for discussion is its future application.

The main controversy is being conducted around two issues.

"One of these questions is for whom the market is intended for speculators or investors," the source said. “Then there is such an issue as currency regulation because liberalization of these instruments and their quoting on the market may lead to currency outflow and affect foreign exchange reserves."

According to the source, there are also a number of issues related to technologies and general financial literacy of the population.

"Some cryptocurrencies are based on blockchain technology,” the source said. “There is such a question whether the market participants will carry out transactions through the blockchain technology. In this case, will we regulate such an issue as cryptographic standards or will it remain at the discretion of the market participants themselves? There is also the fourth block of questions related to awareness of the population, as well as existing and future regulators."

The source said that taking into account those issues, the process of adopting and implementing the law will take a long time.

"The lack of the necessary experience, as well as the prototype, may come to the fore, so the process may take a long time," the source said. “Most of the abovementioned issues are related to the regulator, the Central Bank of Azerbaijan. I think that the working group will have to draw up a protocol. The issues that require clarification from the relevant structures will be indicated there."