Azerbaijan Prepares First Law on Virtual Assets. Binance Welcomes Move Toward Formalization but Avoids Assessing Regulatory Quality
The Central Bank of Azerbaijan has completed work on a draft law on virtual assets and expects its adoption by the end of 2026. For the market, this will be the first attempt to create a comprehensive regulatory framework.
Kirill Khomyakov, Binance Regional Head for Central and Eastern Europe, Central Asia, and Africa, emphasizes that the company does not assess the quality of national draft laws but supports the process of rule-making itself.
Khomyakov:
"Binance is not a regulator and does not take on the role of an independent expert in evaluating legislation. We respect the work of the Central Bank of Azerbaijan and welcome the country's movement toward formalized regulation of the industry. As a global platform, we are open to dialogue and ready to share international experience."
Regulation Could Boost Confidence and Stimulate Market Development in the Region
According to Binance, the adoption of the law could change market dynamics not only in Azerbaijan but also in neighboring countries.
Khomyakov:
"The emergence of a specialized law is a positive signal. Clear rules traditionally increase trust among users and institutional players. We expect that regulation in Azerbaijan will give impetus to market development and serve as a stimulus for more substantive dialogue in the countries of the South Caucasus and Central Asia."
Binance's Strategic Interest: Long-Term Focus and Compliance-First Model
Binance views the Azerbaijani market as part of its long-term strategy, but specific steps will depend on the final version of the law.
Khomyakov:
"Our interest in the region's markets is long-term and built around financial inclusion, user education, and infrastructure that complies with local regulations. Partnerships, licensing, and the development of fiat channels will all be determined by the final regulatory framework. We adhere to the compliance-first principle."
Open Banking: Potential for Integration, but Specifics Will Emerge After Law Adoption
Azerbaijan is actively promoting Open Banking and assessing the digital maturity of the financial sector. Binance sees opportunities here but makes no premature statements.
Khomyakov:
"Open banking ecosystems simplify the transition between traditional financial services and digital assets. It is too early to talk about specific integrations, but we are open to exploring opportunities for interaction with Azerbaijan's Open Banking platform."
He also noted the existence of Binance's B2B solution, Crypto-as-a-Service (CaaS).
Khomyakov:
"CaaS removes the need to build crypto infrastructure from scratch. A bank or fintech retains its customer-facing front end and brand, while Binance provides trading, wallets, security, and compliance with requirements such as the Travel Rule."
AI as a Key Security Element: Binance Ready to Share Expertise
Binance actively integrates AI into risk management and security. The company states its readiness to share experience with regulators, subject to compliance with norms.
Khomyakov:
"We operate more than 100 AI models and over 24 security initiatives. From the start of 2025 through Q1 2026, they helped users save over $10.53 billion and protected more than 5.4 million people. In Q1 2026 alone, AI intercepted 22.9 million fraud and phishing attempts."
Binance has also received ISO/IEC 42001 certification for responsible AI management.
Forecasts: Binance Avoids Numerical Estimates but Expects Positive Effect
The company does not provide quantitative market forecasts before the law is adopted.
Khomyakov:
"We refrain from specific numerical forecasts for a law that has not yet been passed. A clear regulatory framework generally has a positive impact on market dynamics."
Cooperation Formats: Working Groups, Educational Programs, Pilot Projects
Binance is ready to engage with regulators and the business community in Azerbaijan.
Khomyakov:
"We are open to working groups, educational programs, and pilot projects. We have experience in the region: in Kazakhstan, together with Alatau City Bank, we launched a crypto payment service via QR codes and POS terminals within the National Bank's regulatory sandbox. In Kyrgyzstan, we signed a memorandum with the National Agency on Virtual Assets and Blockchain Technologies under the President of the Kyrgyz Republic."