The regulatory application should not include the following statement “We are in the process of launching a cryptocurrency platform”.
Can customers convert cryptocurrency to fiat? The platform will be able to move virtual assets? The company will have control over wallets for clients and private keys? Is it managing the trading platform, lending 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 is an ideal location for fintech companies, but for them to get into the state-regulated virtual asset market, you need more than just registering a business and building a website.
First, you must define the service.
According to the guidelines set forth by PB Services, businesses providing covered virtual-asset services for third parties are required to register as Virtual Asset Service Providers (ASP) with the National Bank of Georgia.
The scope encompasses activities like exchange of virtual assets and transfer, management of platforms for trading and custody or management. It is important to note that the provided regulatory information says the custody concept extends to the management of a user’s private keys or wallet.
That makes the technical design of a crypto product relevant to its regulatory position.
A business owner who would like to get the crypto licence in Georgia must map out the customer’s journey before creating the request. What happens when a customer deposits their assets? Who manages your account? Are assets able to be exchanged or transferred? Who can authorise transactions?
A clear understanding of the answers is helpful to understand what the firm is actually doing.
Your Business Plan must be able to describe a real-world business
VASP applications require more than just a gorgeous pitch deck.
Based on the information provided by according to the information provided, National Bank requires a detailed plan of business with financial projections spanning a minimum period of three years. These include expenses, revenue, and growth expectations. The plan should also show the genuine intent to operate in Georgia.
This requirement should be addressed early.
A business model designed to be used by investors addresses questions about how quickly the business can expand. The business plan that is regulated must explain how the business will run in a responsible manner.
Georgians applying for a VASP license shouldn’t view the commercial model as though it was unrelated. Instead they should be able to connect them.
AML Cannot Be Added at the End
The Anti-Money Laundering as well as the Counter-Terrorism Financing control is among the main components of the procedure as described by PB Services.
The information warns explicitly that the import of an AML policy from another country won’t suffice since Georgian regulations must be integrated into the framework of a company.
It is equally important to take into account the operational system. The business plan must demonstrate that the business’s system company is able to detect any suspicious or related transactions.
Practically, the quality of a platform must affect the development of the product before it can be launched. Building a platform first and seeking out how AML procedures will fit afterward can create unnecessary redesign and create delays.
Capital is contingent on the Services You Choose
Knowing the business model as early as possible is important for a number of reasons, not least the need for regulatory capital.
In accordance with the guidelines in the document the transfer and exchange activities including kiosks, will require 150,000 GEL. Trading-platform management requires 350,000 GEL and other services covered only require 250,000 GEL. The highest threshold applies when a variety of services are offered.
This is distinct from operating capital or capital for investment. Proof that the required amount is actually funded should be included with the request, and the capital has to be maintained during the entire operation.
A business owner who intends to apply for a crypto blockchain license in Georgia should consider regulatory capital prior to the start of financial planning, but not until the rest of the application is completed.
Registration Don’t End the Compliance Work
The calendar of compliance doesn’t expire with the approval. The requirements include continuing obligations related to cybersecurity, risk management and technology resilience. They also address records retention, independent reviews of customer complaints and records retention.
In order to obtain an audit-free opinion from an independent source on the framework for risk management companies must register within 12 months. Businesses must also follow the rules set out in handling complaints. They are required to take complaints seriously, whether they’re written, verbal or electronic, and to examine them within a minimum of a one-month period, and also to submit figures on complaints submitted electronically to National Bank every month.
These factors affect the way a serious applicant should approach licensing.
Imagine the Georgian VASP as a concept for a business rather than a series of forms to fill out.
The company’s structure, model of service model, and technology, AML controls as well the procedures for risk, capital requirements and customer procedures must be in sync.
Georgia is a fantastic location for crypto and fintech companies. The regulatory framework it has provides an easy path to market. But the most effective starting point isn’t determining how quickly it is possible to obtain a license.
It’s describing, in precise terms, the things your crypto company will be doing and proving that your company is able to carry out the work within the Georgian legal framework.