The regulation application should not include the following statement “We are setting up a platform for cryptocurrency”.
Can users exchange crypto to fiat currencies? The platform will be able to transfer virtual assets? Is the company in charge of the wallets of clients or keys? Is it managing a trading platform, crediting against digital assets or intending 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 might be an appealing setting for fintech companies but to enter its virtual-asset market now requires much more than simply registering a firm and creating a website.
The definition of the scope of service
Businesses offering virtual asset services to third-party clients within the framework outlined in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
Included in the scope are activities like virtual asset exchange and transfer and trading platform administration and custody management for cryptocurrency. It is important to note that the provided legal information states that the custody concept is also applicable to managing a client’s private key or wallet.
That makes the technical design of a product in the crypto space pertinent to its legal status.
Anyone who wants to apply for a crypto licence in Georgia must map out the customer’s journey before formulating the application. What happens after a customer deposits funds? Who controls the account? Are assets able to be transferred or exchanged? Which party authorizes transactions?
Clear answers help establish what the company will actually be doing.
Your Business Plan Should Describe a Real Company
VASP applications need more than just a visually appealing pitch deck.
According to the information supplied, the National Bank requires a detailed business plan that contains financial projections covering the minimum of three years. They include the amount of revenue, expenses, and the growth forecast. The plan should also show that there is a genuine intention to be operational within Georgia.
This is a need that must be addressed in the earliest possible time.
A business plan designed for investors will address questions like: How quickly will the company expand? The business plan of an operation that is regulated must include information on how it will be run in a responsible manner.
Georgian applicants seeking a vasp licence shouldn’t treat the commercial model as though it was not related. Instead they should link them.
AML Cannot be added to the end
PB Services has described the preparation process as a key element of the controls to stop the financing of terrorists and money laundering.
The material is specifically cautioned against importing policies regarding AML from a different jurisdiction, as Georgian regulations need to be integrated into the structure of a business.
The operational systems are important too. Business plans must show that the system of the business can identify related and potentially suspicious transactions from the start.
Practically, the quality of a platform must affect the development of the product before it can be launched. The process of creating a platform before seeking out what AML procedures will fit afterward will result in unnecessary redesigns and create delays.
The Services You Choose Can Change Your Capital
The necessity to create an early business model is a result of the capital required by the regulatory authorities.
As per the thresholds set out in the sources the transfer and exchange activities, including kiosks, require 150,000 GEL. Trading-platform administration needs 350,000 GEL in addition to other covered services need 250,000 GEL. When multiple services are provided the threshold that is the most applicable is the one to be used.
It’s not as simple as normal operating capital. Evidence that the required amount is actually paid for must be included with the request, and the capital needs to be maintained throughout operation.
A founder who is planning to submit an application for a crypto-blockchain license in Georgia should consider regulatory capital in the course of financial planning, not until after the remainder of the application has been completed.
Registration Doesn’t Finish the Compliance Work
The compliance calendar will not disappear after approval. The provided requirements detail regular obligations related to risk management and cybersecurity as well as technology resilience and fraud risk, as well as the retention of records, independent reviews and complaints from customers.
A risk management framework For instance, a risk-management framework must receive an opinion from an independent auditor within the 12 months of its registration. As per the regulations, companies must take complaints in oral or written form and examine them within a month. They must also submit statistics on complaints to the National Bank electronically each month.
These factors affect the way serious applicants should approach licensing.
Instead of thinking of a Georgian VASP application as a collection of forms required for obtaining permission to use it, think of it as the style of an regulated business.
The structure of a company’s business, its service model and technology, AML controls as well the procedures for risk, capital requirements and customer processes must all be coherent.
Georgia continues to provide opportunities for fintech and crypto businesses, and its regulatory framework is a well-defined path to market. But the strongest starting point isn’t about how fast it is possible to obtain a license.
It is being able, specifically, to define what your crypto business is planning to do and be able to demonstrate that the business is operating in accordance with the legal framework of Georgia.