The regulation application should not include the statement “We are creating a cryptocurrency platform”.
Are customers able to convert cryptocurrency into fiat? Can the platform transfer virtual assets? The company will be able to control clients’ wallets and private keys? Are they administering a digital asset lending platform, issuing tokens, or managing a trading platform?
These distinctions matter when applying for a cryptocurrency license in Georgia. The services an organization plans to offer affects its regulatory preparation, documents controls, as well as capital requirements.
Georgia is an ideal place to start fintech businesses, however to be able to access its controlled virtual asset market takes more than registering a business and building a website.
Then, you must define the Service.
Businesses that provide virtual asset services to third parties according to the model described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
This includes virtual-asset transfer and exchange, administration of trading platforms, and the administration or custody of cryptocurrency. The regulations state that the custody concept stretches to the management of the client’s private keys, or wallet.
This is what makes the design of a crypto-product relevant to its regulation status.
Before submitting an application for a license an entrepreneur who is looking to obtain an e-currency license in Georgia should map out the customer journey. What happens after a customer deposits assets? Who controls the wallet? Assets can they be exchanged or transferred? Who is the person who is able to authorize a transaction?
Clear answers help establish what the company will actually be doing.
Your business plan should describe the real-world business
VASP applications also require more than a beautiful pitch deck.
The National Bank will expect a comprehensive business plan that includes financial projections for at least three years. It should include revenues, expenses and growth expectations. The plan should also show the intention to be a part of Georgia.
This is a problem that must be addressed early.
Investors may ask questions such as how fast the business will expand. A business plan that is regulated must also explain how the operation will function responsibly.
If a company is that are looking for a license to use vasp Georgia applicants should be prepared to connect the commercial model to the compliance model instead of thinking of them as separate documents.
AML can’t be added at the End
PB Services describes the preparation as a set of steps that includes anti-money laundering as well as counter-terrorism financing controls.
The material is specifically cautioned against importing policies on AML from a different country because Georgian AML regulations must be integrated into the structure of the company.
Furthermore, the operational systems are important. The business plan must demonstrate that the company’s system is able to identify any suspicious transactions.
It is essential to consider compliance as an aspect of product development. By building a platform and then deciding how AML will work it can lead to unnecessary delays and redesign.
The services you choose to use can Change Your Capital
Regulatory capital is another reason to determine the business model in advance.
In accordance with the guidelines in the document the transfer and exchange activities which include kiosks, are required to be 150,000 GEL. Management of platforms for trading needs 350,000 GEL and other services covered need only 250,000 GEL. When several services are provided the most relevant threshold is the one to be used.
This is different from regular capital investment or operating capital. The application has to be accompanied by proof that the required amount has been funded.
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 isn’t the only aspect of the compliance process.
Approval isn’t the time when the compliance calendar disappears. These requirements cover regular obligations relating to cybersecurity, risk management and technology resilience. They also cover records retention, independent reviews customers’ complaints, records retention.
A framework for risk management, for example, will require an opinion from an independent auditor within one month of registration. The rules state that companies are required to take complaints in writing or in oral form and review them within one month. They must also submit statistics on complaints to the National Bank electronically each month.
These factors affect the way a serious applicant should approach licensing.
Imagine an Georgian VASP Application to represent the layout of a legally regulated business.
It is essential that the corporate structure along with the technology, AML controls and regulatory capital, as well as the customer’s processes are in sync.
Georgia continues to present opportunities for fintech and crypto companies. Its regulatory framework is a well-defined way to enter the market. However, asking about the speed at which you can receive an authorization isn’t necessarily the best approach to begin.
You should be able to explain in detail how your business’s crypto-related activities will be, and demonstrate that you’re prepared to comply with Georgia’s regulations.