Development Of The Crypto Trading Market In Azerbaijan
Despite the high interest in the crypto market, the government’s position regarding cryptocurrencies is still pretty conservative. Obviously, at the state level, Azerbaijan doesn’t recognize cryptocurrencies as a means of payment, but it plans to create a legislative framework for the use of blockchain technology in the financial and banking sector and in public services. The first stage is to create a stable technological and legislative infrastructure.
Cryptocurrencies traders believe that it’s necessary to develop a model of interaction of digital money with the old model of the economy, working on the basis of a traditional monetary system based on fiat money
Since the volume of cryptocurrency trade is growing in Azerbaijan, the state wants to increase budget revenues by taxing transactions with digital currencies. Income from crypto-fiat transactions is to be taxed in Azerbaijan. If you have some crypto profit, you should register it as income tax or as profit tax if you’re a legal entity. If someone buys a cryptocurrency and then sells it after the price goes up, this amount will be recorded as income and therefore should be reported on the tax return.
Despite the fact that the central bank of Azerbaijan is actively preparing for the use of smart contracts, which automate all processes, not allowing making any changes in them, the bank doesn’t plan to issue its own cryptocurrency. The main reason for this is that trading with cryptocurrencies can carry risks.
Development of a blockchain
The Republic of Azerbaijan plans to complete the development of a blockchain-based digital identification system and the system should be launched soon. Regarding blockchain technology, Azerbaijan seeks to attract new technologies that meet all global standards. A modern Data Center was created, which is both a scientific center, an industrial enterprise, and a major business enterprise, whose goal is to promote industrial activity, conduct research, export projects, and attract foreign investment in the field of information technology.