It’s not precise enough to describe a regulation application like “We’re creating our own cryptocurrency platform”.
Will customers exchange cryptocurrency for fiat? Can the platform transfer virtual assets? Will the company be in control of client wallets or keys? Will it manage the trading platform or lend against digital assets?
These differences are essential when applying for the crypto-license in Georgia, because the services a company is planning to provide will affect the requirements of its regulators such as documentation, control and capital requirements.
Georgia is an ideal location for fintech firms, but to enter its regulated virtual asset market takes more than registering a company and creating a site.
The definition of the service
Businesses offering virtual asset services to third parties under the framework described in PB Services must register with the National Bank of Georgia as Virtual Asset Service Providers.
This includes the transfer of virtual assets, exchange, the administration of trading platforms, and management or custody of cryptocurrency. Importantly, according to the information provided by the regulator the concept of custody includes management of a client’s personal key and wallet.
This makes the design of a crypto-product relevant to its legal status.
Before submitting an application for a license for a business founder looking to obtain an e-currency license in Georgia must outline the customer’s journey. What happens when a customer deposits funds? Who owns the wallet? Are assets able to be exchanged or transferred? Which person is authorized approve transactions?
Clear answers help establish what the firm will be doing.
Your Business Plan Must Describe the real business
VASP applications require more than just a visually appealing pitch deck.
Based on the information given in the report, according to the information provided, National Bank requires a detailed plan of business with financial projections spanning a minimum period of three years. These include expenses, revenue, and the growth forecast. The plan must also demonstrate a genuine intention to operate in Georgia.
This is a requirement that needs to be considered early.
A business plan written to be used by investors will answer questions like: How quickly can the company grow? The business plan for a regulatory operation must also include details about how it will be run in a responsible manner.
Businesses that seek vasp Georgia license must be prepared to link both the commercial model and compliance model instead of treating them as separate documents.
AML is not able to be added at the End
Anti-Money Laundering and Counter-Terrorism Controls for financing are among the most important components of the plan that is described by PB Services.
The provided material specifically warns against importing a law regarding AML from a different country because Georgian regulations need to be integrated into the structure of a business.
The operational systems are vital. Business plans must show that the system in place by the company can spot related and suspicious transactions at the very beginning.
In practice it is essential that compliance be a factor in product development before launch. It is not advised to create a platform prior to deciding on how AML policies will be applied. This can lead to costly redesigns and delays.
The Services You Select Can Impact Your Capital
The need to develop a business model early is also due to the capital required by the regulatory authorities.
Based on the thresholds set in the sources, kiosks and exchange activities require 150 000 GEL. Administration of the trading platform is required to be 350,000 GEL and other covered services need 250,000 GEL. If several services are offered the threshold which is highest applies.
This is distinct from normal capital for investment or operating. A proof that the requested amount is actually financed must accompany the request. Likewise, the capital must be maintained throughout operation.
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 doesn’t complete the compliance work
The calendar of compliance doesn’t end with approval. The supplied requirements describe regular obligations that involve cybersecurity, risk management technology fraud risk, recording retention, independent review and customer complaints.
In order to obtain an independent audit opinion on the risk management framework companies must register within twelve months. The guidelines for handling complaints require businesses to accept complaints in oral, written or electronic formats and review them within a maximum of a month, and then provide the information about complaints electronically to the National Bank each month.
These particulars can alter the way in which a serious applicant takes licensing.
Imagine the Georgian VASP as a design for a business rather than a series of forms to fill out.
It is crucial that the company structure as well as the technology used, AML controls and regulatory capital, along with customer processes, are all in harmony.
Georgia is a fantastic place to start fintech and crypto businesses. The regulatory framework it has provides an established path to market. However, the best starting point isn’t asking how quickly it is possible to obtain a license.
It’s being able to explain, in precise terms, the things your crypto company will perform and showing that the company is prepared to carry out the work within the Georgian regulatory framework.