The regulatory application should not contain the words “We are setting up a platform for cryptocurrency”.
Can customers convert cryptocurrency to fiat? Can the platform be used to transfer virtual assets? Does the company have control over client wallets or private keys? Are they managing a digital asset lending platform in the process of distributing tokens or overseeing a trading system?
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 an ideal location for fintech companies, but to enter its regulated virtual asset market is more than simply registering a company and establishing a website.
First, Define the Service
Businesses that provide virtual assets 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.
In the scope of this are activities like virtual transfer and exchange of assets along with trading platform administration and custody or management of cryptocurrency. The regulations state that the custody concept extends to the administration of the client’s private keys, or wallet.
This makes the design of a crypto-product relevant to its regulatory status.
Anyone who wants to obtain the crypto license in Georgia should therefore map the customer journey they intend to take before making the application. What happens when the customer deposit their money? Who manages your account? Are assets able to be transferred or exchanged? Which party authorizes the transactions?
The clarity of the answers can help to establish what the firm will do.
Your business plan must detail the actual business
A VASP application also needs more than an attractive pitch deck.
The National Bank will expect a comprehensive business plan that includes financial projections that last at least three years. This should include revenues, expenses and growth projections. The plan should also show that there is a genuine intention to operate within Georgia.
This is an issue that must be addressed as soon as possible.
Investors can ask questions like how fast the company will grow. A plan for business that is regulatory must also explain how the operation will function responsibly.
For companies that are looking for a license to use vasp Georgia applicants should be prepared to connect the commercial model with the compliance model instead of using them as separate documents.
AML cannot be added to the End
The Anti-Money Laundering as well as the Counter-Terrorism Controls on financing are among the most substantial parts of the plan that is described by PB Services.
The provided material specifically warns against the importation of a policy on AML from a different jurisdiction, as Georgian AML regulations must be integrated into the overall framework of a firm.
The operational systems must be considered too. The business plan should demonstrate that the systems of the business can spot suspicious or related transactions.
Practically, the quality of a product must influence the development of the product before it can be released. It is not advisable to create a platform prior to making a decision on how AML policies will be applied. This could result in unneeded redesigns and delays.
The Services You Select Can Impact Your Capital
Another reason is regulatory capital. to define the business model early.
In accordance with the thresholds specified in the sources, kiosks and exchange activities require 150 000 GEL. Trading platform administration requires 350,000 GEL and other services need 250,000 GEL. When multiple services are provided, the highest applicable threshold determines.
This is distinct from operating capital or capital investment. A proof that the amount was actually funded must be submitted with the application and the capital needs to be kept in place throughout the operation.
A business owner who intends to submit an application for a crypto-blockchain license in Georgia is required to think about regulatory capital at the time of financial planning, not after the rest of the application has been submitted.
Registration Don’t End the Compliance Work
The calendar of compliance does not expire with the approval. The requirements provided outline ongoing obligations involving risk management, cybersecurity technology and fraud risk, as well as record retention, independent review and complaints from customers.
For example, an independent auditor’s opinion regarding the risk-management framework has to be sought within 12 months from the time of registration. The described complaint-handling rules also oblige businesses to take complaints in written, oral or electronic formats and then examine them within a period of a month, and send complaint statistics electronically to the National Bank each month.
These aspects can alter the way a serious license applicant takes licensing.
Imagine the Georgian VASP Application to represent the layout of a controlled business.
The structure of the business, the service model technology, AML controls, capital regulations processes, risk management, and customer processes have to make sense together.
Georgia continues to offer opportunities for crypto and fintech businesses. Additionally, its regulatory framework is a well-defined path to market. However, asking about the speed at which you can apply for a license isn’t the most effective way to start.
It is being able, in a specific manner, to define what your crypto business plans to do and to be able to demonstrate that the business will be doing so within Georgia’s legal framework.