Monthly Archives: January 2022

Apple Pay, the tech giant’s mobile payment software for cashless & card-free purchases, has launched in Armenia with support for Mastercard and Visa cards issued by Acba Bank, Ardshinbank, Ameriabank, Converse Bank, Inecobank, and Unibank․ They have all officially announced that the service is available to their customers in Armenia․ Customers can now make contactless payments after adding their card to the Wallet app on iPhone and Apple Watch.

• The app allows users to make online purchases through contactless technology, both in-app (iOS) and on-site. After shoppers have their credit card stored on the iPhone, they only need to keep the phone near an NFC scanner, use the iPhone’s Touch ID to accept the purchase using their fingerprint, and the payment is processed within a few seconds. The approach is easier than the conventional swiping procedure for credit cards. Customers would enjoy the quick Apple Pay checkout; there is no need to enter the detailed information of the credit card.
• It is secure. Since there is no requirement for a credit card to be present, the risk of a stolen number is smaller. In comparison, Apple does not use the credit card number to make the purchase but uses a token to complete the transaction called the “device account number” which further decreases the likelihood of stolen credit card information. In other words, to keep transactions secure, Apple uses a method known as “tokenization,” preventing actual credit card numbers from being sent over the air. Apple also secures payments using Touch ID or Face ID on compatible iPhones and continual skin contact on the Apple Watch. Apple Pay is an adaptation of the EMVCo standard that is regarded as the most reliable payment system by many industry experts.
• To use Apple Pay, an internet connection isn’t required. It can be used anywhere and roaming charges should not accumulate. It can still be accessed even if your phone is in airplane mode.
• It is more confidential. Apple will not monitor the purchases of customers and store the details. This provides more privacy. The use of device account numbers against the credit card often makes the purchase with the stores much more confidential as they do not see the identity of the customer and other information, such as the billing address.

This article aims to know the impact of using cryptocurrency that replace conventional money as a means of payment in Armenia. This article belongs to the type of normative legal research that is prescriptive to produce a new concept in resolving the problems faced by supported by a legal approach and a case approach.

The world trade development which grew rapidly as time goes by has an impact in influencing payment systems. Along with the enhancement of the world economy globalization, the need for speed, convenience and security of financial transactions is increasing Therefore, there is a need of reliable and easy payment system for banking customers. The payment system is a mechanism that includes arrangements used for payment through value exchanges between individuals, financial institutions both domestically and globally.

The cryptocurrency is a digital asset that is secured by cryptography. However, discussions regarding the legal status and regulation are still sensible. Crypto, inter alia, is used widely as a payment instrument, and in this sense, various areas of сivil law can intersect.

At the level of a press release, the Central Bank of Armenia, assessed cryptocurrencies as a high-risk instrument. This statement is not legally binding, although, as a soft instrument, it has a certain impact on the policy of private banks in Armenia.

Armenian regulatory framework seems indifferent to this issue. Regarding cryptocurrency, there is only one mention, according to which crypto is an asset. Also, considering the narrow and very specific scope of that law, this cannot be perceived as a general approach. Therefore, target regulations in respect of cryptocurrencies are not in place in Armenia.

But can cryptocurrencies be considered legal tender in Armenia?

According to the law on “Currency regulation and currency control” of Armenia payments between residents of Armenia against the sale of goods (property), rendering of services, insurance contributions, indemnifications shall be accepted and made in Armenian drams unless otherwise provided by the Law.

Concurrently, only in limited circumstances, such as when paying a non-resident, is the use of foreign currency weakened. It should be also highlighted, that in contrast to the mentioned rules when paying by crypto, firstly it is to be justified that crypto is a foreign currency.

According to the same law, foreign currency (foreign exchange) means:

1. a) legal tender, such as notes and coins (including souvenir coins) in circulation or out of circulation, but subject to exchange, in one or several foreign countries,
2. b) resources denominated in foreign currency and/or international monetary units, which are available in accounts and deposits.

Crypto doesn’t meet any of the mentioned conditions, so there are no restrictions in this point of view.

In addition, crypto can serve as an exchange equivalent. The Civil Code of Armenia entitles contractual parties to place under the ownership of the other party goods, in exchange for other goods.  In this scenario, parties have a wide range of decision-making discretion, and any property, including digitalized assets, can be subjected. Unlike a contract of sale, where the transaction can be disputed, If the parties are agreed so, there are no visible restrictions to using cryptocurrency as a value exchange equivalent in Armenia.

However, there is a need of regulations for governing and explaining cryptocurrency as a means of payment in Armenia. The existing regulations do not suggest much valuable on regulating the use of cryptocurrency as a means of payment and does not regulate the prohibition for using it in Armenia. The rules relating to cryptocurrency ownership must also be explained so that users do not report about the loss or manipulation data from the use of cryptocurrency. This effort is to prevent the misuse of cryptocurrency, if its users also have regulations, then if something happens, can report or sue to the state or the authorities.

Redbridge is honored to become a Member of the American Chamber of Commerce (AmCham) in Armenia. AmCham is an independent business association operating in Armenia since 2000. AmCham represents the interests of 140+ member companies from almost all sectors of the economy. AmCham’s goal is to enhance US-Armenia business relations and improve business and investment climate in the country. AmCham is a member of US Chamber of Commerce and European Council of American Chambers of Commerce.

Redbridge will do the best to promote U.S., foreign, and local investments in Armenia and to work with the Armenian government and business leaders to foster a more favorable business climate.

For more information see: AmCham

The stock market brings together, interacts with, and transacts with many market makers. Stock market allows for the price discovery of corporate shares and serve as an economic barometer. The Armenia Securities Exchange (AMX) is the only regulated security market operator in Armenia. Here are some recent developments on the stock market:

• Standard & Poor’s (S&P) Global Ratings assigns “B+” long-term foreign – and local-currency sovereign credit ratings to Armenia.
• For the second consecutive year, AMX has been recognized as the “Best Securities Exchange in South Caucasus 2021”by Global Banking and Finance Review.
• AMX has developed and for the first time in the region introduced corporate bond exchange indices on a daily basis. Indices can be used by investors to get information on the overall market picture, for risk and portfolio analysis, fund performance evaluation, as well as comparative analysis.
• For the first time ever, the bonds listed on the AMX have been cross listed on the Moscow Exchange Market (MOEX).
• The income earned from the listed bonds are tax-free. As a result of the tax reform, the corporate bond market has been developed significantly. In terms of both the quantity of listed bonds and the volume of transactions the bond market becomes active than ever.

 

We are thrilled to announce that the Global Law Experts’ (GLE) research department has selected Redbridge’s Managing Partner, Gevorg Tumanov as a Leading Expert in International Business Law for Armenia.

Global Law Experts is the premier guide to leading attorneys throughout the world. GLE is the only organisation to recommend just one legal expert in each key practice area and country.

Full text: GLE Leading Expert in International Business Law (Armenia) – 2022