The regulatory application should not include the following statement “We are setting up a platform for cryptocurrency”.
Are customers able to exchange cryptocurrency to fiat? Can the platform transfer virtual assets? Will the company have control over the wallets of clients and private keys? Is it administering an exchange platform and crediting against digital assets or intending to issue tokens?
These distinctions are crucial when obtaining permission to operate a cryptocurrency in Georgia. The kind of services the business plans to offer influences its preparation for regulatory documents, controls, and capital requirements.
Georgia is a great place for fintech companies, but to be able to access its controlled virtual asset market, you need more than just registering your business and building a website.
Defining the nature of service
Under the framework described by PB Services, businesses providing covered virtual asset services to third parties must register as Virtual Asset Service Providers with National Bank of Georgia.
The scope of the concept includes things such as virtual-asset exchange and transfer, management of platforms for trading and custody of cryptocurrency management. Importantly, the supplied legal information states that the concept of custody also applies to the management of a user’s private wallet or key.
This means that the design of a crypto-product relevant to its regulation 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 consumer deposit funds? Who owns the wallet? Are assets able to be exchanged or transferred? Who can authorise transactions?
The clarity of the answers can help to clarify what the company will actually do.
Your business plan must detail a real business
A VASP application also requires more than just a nice pitch deck.
The National Bank will expect a comprehensive business plan that includes financial projections that last at least three years. This must include revenues, expenses and growth assumptions. The plan must also demonstrate the genuine intent to operate in Georgia.
It is important to address this issue as quickly as it is possible.
A business model written for investors answers questions such as how quickly the business can expand. The business plan of the regulatory process must contain details on how the operation will be conducted responsibly.
Companies looking to obtain a vasp licence Georgia applicants should be prepared to connect the commercial model to the compliance model instead of treating them as unrelated documents.
AML is not possible to add at the conclusion
PB Services describes the preparation as a sequence of steps which include anti-money laundering and counter-terrorism financing controls.
The provided material warns that simply importing an AML policy from another jurisdiction is not enough since Georgian requirements need to be incorporated into the company’s framework.
It is also essential to consider the operational systems. The business plan should be able to demonstrate that the business’s system is able to identify potential suspicious transactions as well as related transactions.
Practically, the compliance of a product should influence its development before it is launched. It is not advised to design a platform before deciding how AML policies are to be implemented. This could result in delay and unnecessary changes.
The Services You Select Can affect your capital
The need to develop an early business model is due to regulatory capital.
In accordance with the thresholds specified in the sources, kiosks and exchange activities need 150 000 GEL. Trading platform administration needs 350,000 GEL, while other covered services require 250,000 GEL. If multiple services are being offered the most relevant threshold is the one to be used.
It is not the same as ordinary operating capital. Documentation that proves the required amount has actually been funded must accompany the application, and the capital must be maintained throughout the course of operations.
The founder who wishes to get a crypto-blockchain license in Georgia must take into account the capital required by Georgia’s regulatory authorities in his budgeting prior to the time that the other aspects have been taken care of.
Registration isn’t the only aspect of compliance work
The approval is not the point when the compliance calendar goes away. The obligations include continuing obligations related to cybersecurity, risk management and technology resilience. They also address the retention of records, independent review of customer complaints and records retention.
A framework for risk management For instance, a risk-management framework requires an opinion by an independent auditor within a month of registration. As per the regulations, businesses are required to accept complaints in writing or in oral form and then review them within a month. Additionally, they must transmit statistics about complaints to the National Bank electronically each month.
These factors affect the way an experienced applicant approaches licensing.
Instead of thinking of an Georgian VASP application as a set of forms required for obtaining permission to use it, think of it as a design for the business that is regulated.
It is crucial that the company structure along with the technology, AML controls and regulatory capital, as well as the customer’s processes are in sync.
Georgia provides opportunities for crypto and fintech companies, and the legal framework provides an easy way to enter the market. But asking about how quickly you can get a license is not the most effective way to start.
It’s being able, in a specific manner, to detail what your crypto company is planning to do and prove that your company is operating in accordance with Georgia’s legal framework.