The application for regulatory approval should not include the phrase “We are creating a cryptocurrency platform”.
Customers can exchange crypto for fiat currency? The platform will be able to transfer virtual assets? Does the company control over wallets for clients and private keys? Is it planning to run the trading platform or lend against digital assets?
Those differences matter when pursuing the crypto license in Georgia because the services a company is planning to provide affect its regulatory preparation and documentation, controls as well as capital requirements.
Georgia could be a desirable location for fintech firms however, gaining access to its controlled virtual-asset market today requires more than registering a company and creating a web site.
Defining the scope of service
According to the guidelines set forth by PB Services, businesses providing covered virtual-asset services for third-party clients must be registered as Virtual Asset Service Providers (ASP) with the National Bank of Georgia.
This includes virtual-asset transfer and exchange, administration of trading platforms, as well as the administration or custody of cryptocurrency. As per the information provided by the regulator, the custody concept includes management of a client’s personal key and wallet.
This creates the need for an crypto-product important to its legal status.
A founder interested in obtaining a crypto license in Georgia should therefore map the proposed customer journey before preparing the application. What happens when a customer deposit their money? Who manages your account? The assets can be transferred or exchanged? Who authorizes the transaction?
It is important to know the exact nature of what the business will be doing.
Your business plan must detail the real-world business
VASP applications also require more than just a gorgeous pitch deck.
The National Bank will expect a detailed business proposal that includes financial projections that last at least three years. The plan should contain revenues, expenses and growth expectations. The plan must also demonstrate a real intent to operate within Georgia.
This need should be taken seriously and addressed as early as possible.
A business plan that is written to be used by investors will answer the following questions: How quickly can the company grow? A business plan for any regulatory activity must include information on how it will be run with care.
Businesses that seek vasp Georgia license must prepare to link both the commercial model and compliance model, rather than thinking of the two as distinct documents.
AML is not able to be added at the End
PB Services describes the preparation as a series of actions that cover anti-money laundering, as well as anti-terrorism financing controls.
The supplied material specifically warns that just taking an AML policy from another country is not sufficient since Georgian laws must be incorporated into the company’s framework.
The operational systems are important also. The business plan should demonstrate that the company’s system can spot related and suspicious transactions from the start.
Practically speaking, the conformity of a platform must affect its design before it’s launched. First, establishing a platform and considering how AML procedures fit in the future can create unnecessary redesign and lead to delays.
Capital is contingent on the Services You Select
Determining the business model as early as is possible is important for a number of reasons, including regulatory capital.
As per the thresholds listed in the sources, kiosks and exchange activities need 150 000 GEL. The administration of platforms for trading is required to be 350,000 GEL and other services require 250,000 GEL. If several services are offered the threshold which is the highest is used.
It’s not the same as normal operating capital. The application must be accompanied by evidence that the amount requested has been funded.
The founder who wishes to obtain a crypto-blockchain license in Georgia should consider the capital required by Georgia’s regulatory authorities in his budgeting and not wait until the rest is completed.
Registration Don’t End the Compliance Work
The compliance calendar doesn’t disappear with the date of approval. The provided requirements outline ongoing obligations involving risk management, cybersecurity, technological resilience fraud risk, recording retention, independent review and complaints from customers.
A risk management framework such as a risk management framework, for instance, requires an opinion from an independent auditor within a months from the date of registration. According to the rules, companies are required to take complaints in written or oral form and must review them within one month. They also have to provide a report of complaints to the National Bank electronically each month.
These aspects can alter the way that a serious license applicant approaches licensing.
Imagine that you are using a Georgian VASP Application as the design of an regulated business.
The structure of the company, its service model, technology, AML controls, regulatory capital, risk procedures, and customer processes need to be able to work together.
Georgia is a fantastic place for fintech and crypto businesses. The framework for regulation provides a well-defined path to the market. However, asking when you can apply for a license isn’t the most effective way to start.
It’s being able to explain, in precise terms, what your crypto business will do and demonstrating that your business is prepared to do it within the Georgian regulatory framework.