The regulatory application should not include the following statement “We are launching a cryptocurrency platform”.
Will customers exchange cryptocurrency for fiat? Will the platform allow the transfer of virtual assets? The company will be able to control clients’ wallets or private keys? Does it plan to administer the trading platform or lend against digital assets?
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 a fantastic location for fintech firms, but to be able to access its controlled virtual asset market requires more than registering a business and creating a website.
First, define the Service.
In the framework outlined by PB Services, businesses providing covered services in the field of virtual assets for third parties are required to register as Virtual Asset Service Providers with National Bank of Georgia.
In the scope of this are the activities of virtual transfer and exchange of assets as well as management of trading platforms and custody management for cryptocurrency. According to the regulatory information supplied, the custody concept includes management of a client’s personal keys and wallet.
This creates the need for the crypto-product relevant to its legal status.
Anyone who wants to obtain a crypto license in Georgia must therefore sketch out the customer journey they intend to take before preparing the application. What happens when a user makes a deposit of funds? Who owns your wallet? Are assets able to be traded or transferred? Who is the one who is able to authorize a transaction?
Clear answers help establish what the business is actually going to be doing.
Your Business Plan Must provide a realistic description of your business
VASP applications require more than a beautiful pitch deck.
According to the information provided, the National Bank requires a detailed plan of business that contains financial projections for an minimum of three years. This includes revenue, expense, and growth expectations. The plan must also demonstrate a genuine intention to operate in Georgia.
This is a requirement that needs to be considered early.
A business plan to be used by investors will answer questions such as: How fast will the company expand? A plan for business that is regulatory must provide a clear explanation of how the company will function responsibly.
Companies looking to obtain a vasp licence Georgia applicants must be able to connect the commercial model to the compliance model, rather than thinking of them as separate documents.
AML is not possible to add at the very end
PB Services describes the preparation as a series of actions which include anti-money laundering and counter-terrorism financing controls.
The information provided specifically warns against importing policies regarding AML from a different jurisdiction, as Georgian laws must be integrated into the framework of the company.
Furthermore, the operating systems are essential. The business plan needs to demonstrate that the company’s system can identify related and potentially suspicious transactions from the outset.
Practically speaking, the conformity of a product has to influence its development before it is released. It is not advised to build a platform before deciding how AML policies will be implemented. This could result in costly redesigns and delays.
The Services You Choose Can affect your capital
Establishing the business’s model as early as possible is essential for a variety of reasons, including regulatory capital.
According to the requirements in the source materials for transfer and exchange, as well as kiosks must be at or near 150,000 GEL. Platform management for trading requires 350,000 GEL and other services covered require only 250,000 GEL. When several services are provided the most relevant threshold applies.
It’s not the same as normal operating capital. The application must be accompanied by evidence that the amount requested has been funded.
A founder who is planning to apply for a crypto-blockchain license in Georgia should consider regulatory capital at the time of financial planning, not after the rest of the application is completed.
Registration doesn’t complete the compliance work
The compliance calendar cannot disappear with the date of approval. These requirements cover continuing obligations related to cybersecurity, risk management and technology resilience. They also address record retention, independent reviews of customer complaints and records retention.
A risk-management framework, for example, must receive an opinion by an independent auditor within the 12 months from the date of registration. In accordance with the regulations, businesses must accept complaints either in written or oral form and must review them within one month. They are also required to submit statistics on complaints to the National Bank electronically each month.
These factors affect the way a serious applicant should approach licensing.
Think of the Georgian VASP as a visual design for a company, rather than a set of forms that must be filled out.
The structure of the business, the service model, technology, AML controls, regulatory capital processes for risk, as well as customer processes need to connect.
Georgia remains a wonderful location for crypto and fintech companies. The framework for regulation provides a well-defined path to the market. However, asking about the speed at which you can receive an approval isn’t the best approach to begin.
You should be able to define in detail the goals of your crypto-business’s goals are, and demonstrate that you are prepared to abide by Georgia’s laws.