Armenia may soon follow in the footsteps of countries like Belarus in regards to crypto regulation. Newly proposed legislation provides the basis for legalizing and regulating cryptocurrency mining in the country. Tax exemptions and other incentives will be offered to miners. If the draft law is adopted, businesses will be able to operate mining facilities without any licensing. This will indirectly legalize cryptocurrency transactions.
Time to Move with the Times
The bill to regulate the mining of cryptocurrencies like bitcoin has been introduced in the parliament in Yerevan. If Armenian lawmakers vote for the new legislation, their country will become the second member-state of the Eurasian Economic Union (EAEU) to demonstrate positive attitude towards the crypto sector. Belarus has already taken steps in that direction legalizing cryptocurrencies, regulating ICOs, and exempting miners from taxation.
The proposed amendments are quite liberal. Every private individual and corporate entity in Armenia would be allowed to set up facilities and start mining, Eurasia Daily reports. No special permits or licenses will be required. The draft exempts miners from taxation until December 31, 2023, and that incentive is retroactive. Mining companies may enjoy other benefits like preferential customs tariffs.
Behind the initiative to legalize cryptocurrency mining is Edmon Marukyan, member of the parliamentary minority, who says he was motivated by “the need to move with the times”. Despite his affiliation with the opposition, Marukyan may succeed in pushing through his Law “On Digital Technologies”, as there have been some positive developments in the same direction throughout the whole region.
Armenia’s neighbor Georgia is a real pioneer in crypto legalization among countries in the South Caucasus. The implementation of blockchain technologies there has been expanding for several years, in both the private and the public sector. The first bitcoin mining farm in Transcaucasia was set up in Georgia, and since 2016 the country’s land register has been maintained on a blockchain.
Eurasian Winds of Changes
The Armenian government has its doubts about the expediency of crypto legalization and Yerevan has already shared its concerns. The Central Bank came out with a statement warning against the use of bitcoin before it is regulated. “According to the law, virtual currencies are not electronic money”, the bank said three years ago. It promised to study the “emission and circulation” of cryptos and user protection practices. The ubiquitous “absence of clear international approach” was also mentioned.
According to experts quoted by Eurasia Daily, Armenian authorities are wary because they realize that current control mechanisms are insufficient. The weakness of government institutions and the proximity to conflict zones increase the risk of cryptocurrencies being used for illicit activities like money laundering and terrorism financing.
It seems, however, that Armenia is shaking off its cryptophobia. Recently, a government think-tank made proposals to place different state registers on a blockchain. Plans to create a free economic zone for startups developing distributed ledger applications were announced in January.
Winds of change are blowing in Eurasia and warming up the crypto climate across the Eurasian Economic Union. The leader in cryptocurrency adoption, Belarus, is preparing to legalize the whole spectrum of bitcoin-related activities. The presidential decree about cryptos, ICOs and smart contracts will come into force by the end of March.
In Russia, the Finance Ministry has already published the draft law “On Digital Financial Assets”. Despite its reservations towards cryptocurrencies, the Central Bank has signaled it would not mind the legalization of crypto mining and coin offerings. Russian Prime Minister Dmitry Medvedev recently stressed the need to synchronize efforts with the other EAEU countries and called for a common approach to cryptocurrency regulation. Kazakhstan, where government leaders met last week, and Kyrgyzstan, which is also a member-state, have taken steps to appear on the global crypto map.
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Law to Legalize Crypto Mining Introduced in Armenia