The regulation application should not contain the words “We are launching a cryptocurrency platform”.
Can users convert cryptocurrency into fiat? Will the platform be able to move virtual assets? The company will be in control of client wallets or keys? Are they managing an online asset lending platform and issuing tokens, or managing a trading system?
These distinctions matter when applying for the cryptocurrency license to operate in Georgia. The service that the company plans to provide will impact its regulatory preparation, documents, controls, and capital requirements.
Georgia offers a regulated market for virtual assets, which is attractive to fintech companies. However, gaining access to this market is more work than simply registering your business and then launching your website.
First, you must define the service.
Businesses offering virtual assets to third parties are required to be registered as Virtual Asset Service Providers (VASP) at the National Bank of Georgia under the guidelines laid out by PB Services.
The scope covers activities like exchange of virtual assets and transfer, management of platforms for trading as well as cryptocurrency custody management. The regulatory information provided states that the custody concept stretches to the management of a clients’ private keys or wallet.
The technical structure of the product in question is crucial to its status in relation to regulation.
A business owner who would like to get a crypto license in Georgia must therefore sketch out the customer journey they intend to take before preparing the application. What happens when the customer deposits their assets? Who manages your account? Can assets be exchanged for or transferred? Who is the party that approves the transaction?
The clarity of the answers can help to determine what the company will do.
Your business plan must detail the actual business
VASP applications also require more than just a gorgeous pitch deck.
According to the information provided according to the information provided, the National Bank requires a detailed plan of operation that includes financial projections that cover at least three years. These include expenses, revenue, and expansion expectations. The plan must also prove genuine intent to operate in Georgia.
This is a need that must be addressed in the earliest possible time.
Investors can inquire about what speed the company will expand. The business plan for regulatory compliance should also describe how the operation will be managed responsibly.
For businesses seeking a vasp license Georgia applicants must be able to connect the commercial model to the compliance model instead of thinking of them as separate documents.
AML is not possible to add at the very end
PB Services has described the preparation process as a key part of it is the controls against money laundering and terrorist financing.
The provided material specifically warns against simply importing a policy on AML from a different country because Georgian rules must be integrated into the overall framework of the company.
The operational systems matter in the same way. The business plan should prove that the company’s system can detect potential suspicious transactions as well as related transactions.
Practically, the quality of a product must influence its design before it’s released. In the process of creating a platform and then deciding on the way AML works in the future, you risk causing delay and unnecessary changes.
Capital Depends on the Services You Select
Establishing the business’s model in the earliest possible time is essential for a variety of reasons, including the requirement for capital.
Under the thresholds provided in the source material the transfer and exchange activities which include kiosks, are required to be 150,000 GEL. Trading platform administration is required to be 350,000 GEL in addition to other covered services need 250,000 GEL. The most stringent thresholds apply for multiple services.
It’s not the same as operating capital that is used for normal purposes. Documentation that proves the required amount was actually paid for must be submitted with the application and the capital must remain in operation throughout its duration.
A founder planning to get crypto blockchain license in Georgia should consequently consider regulatory capital during financial planning not after the rest of the application has already been assembled.
Registration Doesn’t Finish the Compliance Work
The calendar of compliance does not expire with the approval. The requirements provided outline ongoing obligations involving risk management, cybersecurity technological resilience fraud risk, recording retention, independent review and customer complaints.
For example an independent auditor’s report on the risk management framework should be sought within 12 months from the time of registration. The described complaint-handling rules also require businesses to accept complaints in written, oral, or electronic form and then analyze them within a maximum of a month, and provide information about complaints electronically to the National Bank each month.
These particulars can alter the way an experienced license applicant is approached when it comes to licensing.
Consider the Georgian VASP as a concept for a business instead of a collection of forms that need to be filled out.
The company’s structure, model of service model, and technology, AML controls as well regulatory capital, risk procedures and customer processes must all be in sync.
Georgia is a good place for fintech and crypto companies. The regulatory framework it has provides an established path to market. The best place to begin is to inquire about whether a license will be granted.
It is essential to define in detail the goals of your business’s crypto-related activities will be and show that you are prepared to comply with Georgia’s rules.