Armenia
Retail_Trading_Status
- Analysis ID
- #599
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- Latest
- Created
- 2025-12-12 03:43
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- 6b15dc3f...
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Executive Summary
Retail cryptocurrency trading is legal and formally regulated in Armenia following the enactment of the comprehensive 'Law on Crypto-Assets' in July 2025. The Central Bank of Armenia (CBA) serves as the primary regulator, mandating licensing for all crypto-asset service providers (VASPs) including exchanges and custodians. Individuals benefit from a favorable tax regime with 0% capital gains tax on non-entrepreneurial crypto transactions, while businesses are subject to standard corporate tax rates. A transition period is currently in effect until July 2026, allowing existing operators to continue services while securing full compliance.
Key Pillars
Central Bank of Armenia (CBA) as the primary regulator for the crypto market
Mandatory licensing for Crypto-Asset Service Providers (CASPs)
Strict AML/KYC compliance requirements aligned with FATF standards
Segregation of client assets from company funds
Prohibition on banks directly offering crypto services (must use separate subsidiaries)
Landmark Laws
Law on Crypto-Assets (HO-159-N) - Enacted: 2025-07-04
- Comprehensive framework defining crypto-assets as property, establishing the CBA as regulator, and setting licensing requirements for VASPs. It mandates consumer protection measures like asset segregation and introduces a 'same activity, same risk, same regulation' principle.
- Source
Civil Code Amendments (Article 143.1) - Enacted: 2025-07-04
- Formally defines crypto-assets as 'property based on cryptography' that has value or certifies a right, enabling their legal transfer and protection under property law.
Tax Code Amendments - Enacted: 2025-07-04
- Clarifies tax treatment: 0% capital gains tax for non-entrepreneur individuals; 18% corporate income tax for businesses (with potential 1% turnover tax for eligible IT firms).
Considerations
Individuals (non-entrepreneurs) enjoy 0% capital gains tax on crypto profits.
Existing crypto businesses have a transition period until July 2026 to obtain a license.
Banks are prohibited from directly offering crypto services and must establish separate legal entities.
Mining is legal and incentivized, particularly within the ECOS Free Economic Zone (FEZ).
The 'Law on Crypto-Assets' does not cover NFTs (unless fractionalized) or CBDCs.
Notes
The analysis reflects the regulatory environment as of December 12, 2025. The 'Law on Crypto-Assets' is a recent development (July 2025), meaning the market is currently in a transition phase where many operators are likely provisional pending final license issuance in 2026.
Remaining Uncertainties
- The exact list of entities that have successfully obtained the new VASP license as of late 2025 (vs. those still in the transition phase).
- Specific criteria for distinguishing between 'individual investment' (0% tax) and 'entrepreneurial trading' (taxable) for high-frequency retail traders.
Detailed Explanation
Detailed Explanation
Retail cryptocurrency trading is legal and formally regulated in Armenia. This status was solidified with the enactment of the comprehensive 'Law on Crypto-Assets' (HO-159-N) on July 4, 2025, which established a definitive regulatory framework for the sector. The Central Bank of Armenia (CBA) serves as the primary regulator, overseeing the market and mandating licensing for all crypto-asset service providers (VASPs), including exchanges and custodians. The law defines crypto-assets as property based on cryptography, a definition further reinforced by amendments to the Civil Code (Article 143.1) enacted on the same date, which enables their legal transfer and protection under property law. The regulatory approach follows a 'same activity, same risk, same regulation' principle, applying stringent standards to the crypto sector. A transition period is currently in effect, allowing existing operators to continue services while securing full compliance until July 2026. The tax regime, clarified by Tax Code Amendments also enacted on July 4, 2025, is favorable for individuals, applying a 0% capital gains tax on non-entrepreneurial crypto transactions, while businesses are subject to standard corporate income tax rates of 18%, with potential alternative schemes for IT firms. Key compliance requirements for licensed VASPs include strict adherence to AML/KYC standards aligned with FATF recommendations and the mandatory segregation of client assets from company funds to enhance consumer protection. However, the framework includes notable restrictions, such as a prohibition on banks directly offering crypto services, requiring them to establish separate legal entities if they wish to participate. Furthermore, the 'Law on Crypto-Assets' explicitly does not cover non-fungible tokens (NFTs), unless they are fractionalized, or central bank digital currencies (CBDCs). The analysis reflects the environment as of December 12, 2025, indicating the market is in a transitional phase following this recent legislative development.
Summary Points
I. Regulatory Status
* Retail cryptocurrency trading is Allowed-Regulated in Armenia.
* A comprehensive legal framework was established with the enactment of the 'Law on Crypto-Assets' in July 2025.
* A transition period for existing operators is in effect until July 2026.
II. Key Regulatory Bodies
* Central Bank of Armenia (CBA): Serves as the primary regulator for the crypto-asset market, responsible for licensing and supervision of service providers.
III. Important Legislation
* Law on Crypto-Assets (HO-159-N): Enacted on 2025-07-04. This is the core framework that defines crypto-assets as property, establishes the CBA as regulator, sets licensing requirements for VASPs, and mandates consumer protection measures like asset segregation.
* Civil Code Amendments (Article 143.1): Enacted on 2025-07-04. Formally defines crypto-assets as 'property based on cryptography' that has value or certifies a right, enabling legal transfer under property law.
* Tax Code Amendments: Enacted on 2025-07-04. Clarifies tax treatment: 0% capital gains tax for non-entrepreneur individuals; 18% corporate income tax for businesses (with a potential 1% turnover tax alternative for eligible IT firms).
IV. Compliance Requirements
* Licensing: Mandatory licensing for all Crypto-Asset Service Providers (CASPs/VASPs), including exchanges and custodians.
* AML/KYC: Strict compliance requirements aligned with FATF standards.
* Client Asset Protection: Mandatory segregation of client assets from company funds.
V. Notable Restrictions or Limitations
* Banking Sector: Banks are prohibited from directly offering crypto services and must use separate legal entities (subsidiaries) if they wish to participate.
* Scope of Law: The 'Law on Crypto-Assets' does not cover Non-Fungible Tokens (NFTs), unless they are fractionalized, or Central Bank Digital Currencies (CBDCs).
VI. Recent Developments or Notes
* The regulatory framework is very recent, established in July 2025, placing the market in a transition phase.
* Crypto mining is legal and incentivized, particularly within the ECOS Free Economic Zone (FEZ).
* This analysis reflects the regulatory environment as of December 12, 2025.
Full Analysis Report
Full Analysis Report
As of late 2025, Armenia has transitioned from a 'gray zone' to a fully regulated jurisdiction with the entry into force of the 'Law on Crypto-Assets' (HO-159-N) on July 4, 2025. This landmark legislation ended years of regulatory ambiguity that began with the Central Bank's initial risk warnings in 2018. The new framework explicitly legalizes the buying, selling, and holding of cryptocurrencies for retail investors, placing the sector under the direct supervision of the Central Bank of Armenia (CBA). The law adopts a technology-neutral approach, defining crypto-assets as a distinct type of property and applying the principle of 'same activity, same risk, same regulation' to ensure parity with traditional financial services.
The regulatory regime imposes strict licensing requirements on all Virtual Asset Service Providers (VASPs), including exchanges, custodians, and wallet providers. These entities must demonstrate robust AML/CFT compliance, maintain minimum capital reserves, and segregate client funds from operational capital. A notable feature of the implementation is the transition period: entities already operating before July 2025 have until July 2026 to fully comply and obtain their licenses, ensuring market continuity without immediate disruption. Banks, while barred from offering crypto services directly through their banking licenses, are permitted to enter the market by establishing separate, licensed subsidiaries.
From a tax perspective, Armenia has positioned itself as a highly attractive jurisdiction for retail investors. Non-entrepreneur individuals are exempt from capital gains tax on cryptocurrency transactions (0% rate), a policy designed to foster adoption and investment. However, frequent trading that qualifies as 'entrepreneurial activity' may be subject to income tax. Corporate entities face a standard 18% profit tax, though IT companies—including some crypto startups—may qualify for a reduced 1% turnover tax under specific government support programs. Mining activities remain legal and are further supported by the ECOS Free Economic Zone, which offers additional tax holidays and infrastructure support.
Enforcement is active, with the CBA empowered to conduct inspections and impose sanctions for non-compliance. The State Revenue Committee (SRC) has also enhanced its capabilities, acquiring blockchain analytics tools (Chainalysis) to monitor transactions and ensure tax compliance for businesses. While the licensing process for new entrants is rigorous, the clear legal framework has attracted international attention, positioning Armenia as a regulated crypto hub in the Caucasus region.
As of late 2025, Armenia has transitioned from a 'gray zone' to a fully regulated jurisdiction with the entry into force of the 'Law on Crypto-Assets' (HO-159-N) on July 4, 2025. This landmark legislation ended years of regulatory ambiguity that began with the Central Bank's initial risk warnings in 2018. The new framework explicitly legalizes the buying, selling, and holding of cryptocurrencies for retail investors, placing the sector under the direct supervision of the Central Bank of Armenia (CBA). The law adopts a technology-neutral approach, defining crypto-assets as a distinct type of property and applying the principle of 'same activity, same risk, same regulation' to ensure parity with traditional financial services. The regulatory regime imposes strict licensing requirements on all Virtual Asset Service Providers (VASPs), including exchanges, custodians, and wallet providers. These entities must demonstrate robust AML/CFT compliance, maintain minimum capital reserves, and segregate client funds from operational capital. A notable feature of the implementation is the transition period: entities already operating before July 2025 have until July 2026 to fully comply and obtain their licenses, ensuring market continuity without immediate disruption. Banks, while barred from offering crypto services directly through their banking licenses, are permitted to enter the market by establishing separate, licensed subsidiaries. From a tax perspective, Armenia has positioned itself as a highly attractive jurisdiction for retail investors. Non-entrepreneur individuals are exempt from capital gains tax on cryptocurrency transactions (0% rate), a policy designed to foster adoption and investment. However, frequent trading that qualifies as 'entrepreneurial activity' may be subject to income tax. Corporate entities face a standard 18% profit tax, though IT companies—including some crypto startups—may qualify for a reduced 1% turnover tax under specific government support programs. Mining activities remain legal and are further supported by the ECOS Free Economic Zone, which offers additional tax holidays and infrastructure support. Enforcement is active, with the CBA empowered to conduct inspections and impose sanctions for non-compliance. The State Revenue Committee (SRC) has also enhanced its capabilities, acquiring blockchain analytics tools (Chainalysis) to monitor transactions and ensure tax compliance for businesses. While the licensing process for new entrants is rigorous, the clear legal framework has attracted international attention, positioning Armenia as a regulated crypto hub in the Caucasus region.
Source Evidence
Primary and secondary sources cited in this analysis
"This Law shall regulate relations arising with respect to the performance of activities on the crypto-assets market of the Republic of Armenia... The primary authorized body... is the Central Bank."
"The Law on Crypto Assets came into force on July 4... introducing clear legal standards for crypto services, trading, and oversight."
"The process for licensing companies engaged in crypto asset transactions is set to commence in January 2026 and will continue for a duration of one year."
"In July 2025, Armenia became the first country in the Caucasus to introduce a comprehensive, EU-aligned crypto framework... Combined with 0% tax on crypto capital gains for individual investors."
"Crypto-asset service providers are considered to be joint-stock or limited liability companies (LLC) that have obtained a license from the Central Bank of Armenia."
Web Sources (5)
Sources discovered via web search grounding
Search queries used (10)
- Armenia crypto tax laws
- Armenia cryptocurrency regulation 2024 2025
- Is cryptocurrency trading legal in Armenia
- Armenia Law on Digital Assets status
- Central Bank of Armenia crypto warnings
- Armenia crypto tax 0% individual
- Law on Crypto-Assets HO-159-N Armenia text
- Central Bank of Armenia crypto license register
- Armenia crypto exchange license holders
- Central Bank of Armenia crypto license register list
https://www.thearmenianreport.com/post/armenia-s-law-on-cryptoassets-takes-effect-establishes-legal-guidelines
https://armenian-lawyer.com/investment/armenia-crypto-investment-guide-2025-tax-benefits/
https://armbanks.am/en/2025/11/04/267982/
https://armbanks.am/en/2025/11/04/267982/
https://armenian-lawyer.com/business-immigration/cryptocurrencies-and-blockchain-banking-and-legal-status-in-armenia/