The regulatory application should not contain the words “We are in the process of launching a cryptocurrency platform”.

Are customers able to exchange crypto in exchange for fiat currency? Will the platform be able to transfer virtual assets? The company will be able to control clients’ wallets or private keys? Are they managing an online trading platform and crediting against digital assets or intending to issue tokens?

These differences are important when applying for a crypto-license in Georgia due to the services a company is planning to provide will impact its legal requirements, documentation, control, and capital requirements.

Georgia is an ideal location for fintech firms, but to be able to access its controlled virtual asset market takes more than just registering a company and establishing a website.

Defining the service

Companies that offer virtual asset services to third-party clients under the framework described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.

This covers virtual asset transfer and exchange, the administration of trading platforms, as well as the management or custody of cryptocurrency. The regulations state that the concept of custody extends to the administration of clients’ private keys or wallet.

This makes the design of a cryptocurrency relevant to its regulatory position.

A business owner who would like to get cryptocurrency licenses in Georgia should thus map out the desired customer journey prior to creating the application. What happens when a customer transfers their money? Who manages the account? Are assets traded or transferred? Which party is authorized to authorise transactions?

A clear understanding of the answers is helpful to clarify what the company will actually accomplish.

Your Business Plan Needs to provide a realistic description of your business

VASP applications require more than just a visually appealing pitch deck.

Based on the information provided by the National Bank requires a detailed business plan that contains financial projections spanning the minimum of three years. They include income, expense, as well as growth projections. The plan must also prove a real intent to be operational within Georgia.

This need should be taken seriously and addressed as early as possible.

A business plan to be used by investors will answer the following questions: How quickly can the business grow? A regulation-based business plan should provide a clear explanation of how the company is to be run in a responsible manner.

For companies seeking a vasp license Georgia applicants should be prepared to connect the commercial model with the compliance model rather than treating them as unrelated documents.

AML cannot be added at the very end

PB Services describes the preparation as a sequence of steps that include anti-money laundering and counter-terrorism controls.

The material warns specifically that importing an AML Policy from another jurisdiction is not enough since Georgian laws must be included into the framework of a company.

It is equally important to look at the operational systems. Business plans should prove that the system of the business can spot suspicious transactions or those that may be related to them.

Compliance must be a consideration in product development. By creating a platform, then determining the way AML can be implemented it can lead to delay and unnecessary changes.

Capital is contingent upon the Services you Choose

The need to establish an early business model is due to regulatory capital.

According to the thresholds in the documents, kiosks and exchange activities require 150 000 GEL. Management of a trading platform for trading needs 350,000 GEL and other covered services require 250,000 GEL. When several services are provided the most relevant threshold governs.

This is distinct from operating capital or investment capital. The evidence that the amount was actually paid for is required with the application and the capital has to be kept in place throughout the operation.

The founder who wishes to get a crypto-blockchain license in Georgia must therefore consider the regulatory capital in his budgeting prior to the time that the other aspects have been taken care of.

Registration doesn’t complete the task of ensuring compliance.

The compliance calendar cannot disappear at the moment of approval. The provided requirements outline the ongoing obligations in risk management, cybersecurity technology, fraud risk, record retention, independent review, and customer complaints.

A framework for risk management, for example, is required to receive an opinion from an independent auditor within the 12 months after registration. The described complaint-handling rules also stipulate that businesses must accept complaints in oral, written or in electronic format and analyze them within a maximum of a month, and send complaint statistics electronically to the National Bank each month.

The details of these changes affect how an applicant who is serious should approach licensing.

Imagine an Georgian VASP Application as the style of a controlled 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 procedures must be consistent.

Georgia provides opportunities for firms in fintech and crypto, and the legal framework provides an open path to entering the market. But the strongest starting point isn’t determining how quickly the license will be granted.

It’s explaining clearly what your company’s crypto operations will do and demonstrating that the company is prepared to conduct it within Georgia’s legal framework.