Azerbaijan Not Intending To Issue State-Backed Tokens

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Azerbaijan Not Intending To Issue State-Backed Tokens

The Chairman of the Azerbaijan’s Central Bank has dismissed speculations that the government intends to issue a national cryptocurrency. Speaking to reporters, the Central Bank boss, Alim Guliyev made it clear that the institution maintained a ‘conservative stance’ on the matter and they never have plans to issue a national digital asset because of cryptos association with money laundering activities.

CBA officials have been giving similar sentiments on different occasions about the national-crypto topic terming cryptos as inherently “risky and dangerous.”

IMF’s recommendations

Looks like the Azerbaijan’s Central Bank chief is not considering International Monetary Fund’s (IMF) recommendation to create a state-owned crypto that will help moderate the sector and stamp out fraudsters.

IMF chief, Christine Lagarde acknowledges that the rapidly growing demand for virtual currencies makes users vulnerable to scams while giving way to money laundering and terrorism financing.

According to Lagarde, governments should rise to the occasion and create state-backed cryptos in order to counter private sectors’ dominance. Lagarde envisions a public and private sector partnership in the cryptos business where central banks will be tasked with payments processing while private operators focus on providing innovative user-friendly experience.

By so doing central banks will continue running nations’ monetary policies while at the same time averting illegal financial activities like money laundering.

Azerbaijan to adopt blockchain technology

Although Azerbaijan is not planning to issue a state-backed token, the nation has however; shown interest in blockchain- the technology that underpins cryptocurrency. CBA’s Governor Elman Rustamov admitted that although CBA did not recognize tokens as substitute currency, on the other hand, the institution was quite receptive to blockchain technology.

The CBA Governor offered to help on explorations seeking to find blockchain’s application in the nation’s banking and financial industry at large.

Recently, Azerbaijan announced plans to use blockchain in the Ministry of Justice’s systems. The US tech giant IBM, is helping the government utilize blockchain in the notarization process. The government hopes that blockchain solution will bring about transparency and arrest cases of corruptions within the ministry. In the announcement, the government stated that when blockchain’s application in the ministry of justice becomes a success, the technology will be rolled out to other ministries and departments.

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