It’s not enough precise to describe a regulatory application like “We’re the first to launch our crypto platform”.
Can users convert cryptocurrency into fiat? Will the platform be able to transfer virtual assets? Can the company manage client wallets and private keys? Is it managing the trading platform, crediting against digital assets, or planning to issue tokens?
Those differences matter when pursuing a crypto license in Georgia because the services a company intends to provide affect its regulatory preparation, documentation, controls, and capital requirements.
Georgia may offer an attractive setting for fintech companies, but entering its regulated virtual-asset marketplace now requires more than registering a company and creating a website.
First, Define the Service
Companies that provide virtual assets services to third-party clients are required to register as Virtual Asset Service Providers at the National Bank of Georgia under the guidelines laid out by PB Services.
In the scope of this are things like virtual transfer and exchange of assets and the administration of trading platforms as well as custody management for cryptocurrency. Importantly, according to the information provided by the regulator, the custody concept includes the administration of a client’s private key and wallet.
The technical design of the crypto product is crucial to its status in relation to regulation.
A founder interested to obtain the crypto licence in Georgia should sketch out the customer’s journey in making the application. What happens when the customer deposit their money? Who is in charge of your account? Can assets be exchanged or transferred? Who is the person who has the authority to approve a transaction?
Clear answers help establish what the firm will be doing.
Your Business Plan Needs to describe a real business
A VASP application also needs more than an attractive pitch deck.
The National Bank will expect a detailed business proposal that includes projections of financials for at least three years. It should include the growth, expense and revenue estimates. The plan should also show an actual intention to operate in Georgia.
That requirement deserves attention early.
A business plan designed for investors can answer questions like how fast the company can grow. The business plan for any regulatory activity must include details about how it will be run responsibly.
Georgian applicants for a vasp licence should not treat the commercial model as if it was not related. Instead they should link them.
AML is not able to be added at the end
PB Services has described the preparation process as a key part of which are the measures to prevent financial crime and the financing of terrorists.
The supplied material specifically warns that simply importing an AML policy from another country is not enough since Georgian regulations must be integrated into the firm’s framework.
The operational systems must be considered in the same way. The business plan should demonstrate that the system of the company can detect suspicious or related transactions.
The compliance aspect must be a consideration in product development. First, establishing a platform and looking into how AML procedures fit in the future can create unnecessary redesign and delay.
Capital is contingent on the Services you select
Another reason is regulatory capital. to determine the business model in advance.
In accordance with the guidelines in the document Transfer and exchange operations, including kiosks, require 150,000 GEL. The administration of trading platforms is required to be 350,000 GEL while other covered services require 250,000 GEL. The maximum threshold applies when multiple services are provided.
This is distinct from normal operating or investment capital. Evidence that the required amount is actually paid for must accompany the request. Likewise, the capital must be maintained throughout the duration of operation.
A founder planning to get the crypto blockchain license in Georgia should therefore think about regulatory capital during financial planning not after the rest of the application has already been made.
Registration doesn’t finish the compliance process.
The approval is not the point at which the compliance calendar disappears. The provided requirements detail continuing obligations in risk management and cybersecurity, technology resilience, fraud risk and record retention, independent review and complaints from customers.
To obtain an audit report from an independent auditor on the framework for risk management the company must be registered within twelve months. As per the regulations, businesses must accept complaints either written or verbally and examine them within a month. They also have to send statistics of complaints to the National Bank electronically each month.
These particulars can alter the way an experienced license applicant takes licensing.
Imagine the Georgian VASP as a visual design for a business, rather than a set of forms that need to be filled out.
It is crucial that the company structure, technology, AML controls and regulatory capital, along with customer processes, are in perfect alignment.
Georgia continues to offer opportunities for crypto and fintech businesses. Additionally, its regulatory framework provides a defined pathway to the market. The best place to start is to not ask about how fast a license can be issued.
It’s describing in clear terms what your crypto business will accomplish and showing that your company is able to carry out the work within Georgia’s regulatory framework.
