Azerbaijan is moving toward the first comprehensive regulation of its cryptocurrency market with a draft law that will require all virtual asset service providers to obtain a license from the Central Bank of Azerbaijan before operating in the country. The bill has entered the review stage and is expected to be adopted by the end of 2026, according to Fidan Tofidi, Director of the Central Bank’s Department of Financial Technologies and Innovations.
Under the proposed framework, crypto firms must secure central bank approval to serve domestic customers, and licensed entities will face continuous regulatory supervision. The law imposes strict compliance obligations, including anti-money laundering (AML) and counter-terrorism financing measures, along with mandatory customer identification and verification checks. These steps aim to align Azerbaijan’s crypto sector with standards already applied in traditional financial services and to reduce illicit fund flows.
The licensing regime is part of the country’s Financial Market Development Strategy for 2027–2030, which relies on real market data. Tofidi emphasized that safeguarding financial stability remains a priority, and the central bank sees licensing and oversight as critical tools for managing risks. Notably, Azerbaijan has again ruled out issuing a central bank digital currency (CBDC), reiterating its 2024 position that no global CBDC implementation has been fully successful and that potential effects on monetary policy require further assessment.
International engagement has also played a role. Binance confirmed earlier discussions with the Central Bank of Azerbaijan through Olga Goncharova, the exchange’s CIS government relations director. The talks focused on possible regulatory mechanisms for the country’s cryptocurrency market, signaling that major platforms are involved in shaping the emerging rules.
