It’s not clear enough to describe a legal application as “We’re creating our own cryptocurrency platform”.
Can users convert cryptocurrency into fiat? The platform will be able to move virtual assets? Does the company have charge of the wallets of clients or keys? Are they managing the trading platform, crediting against digital assets, or thinking of releasing tokens?
Those differences matter when pursuing cryptocurrency licenses in Georgia due to the services that a business plans to offer determine its preparation for the regulatory process documents, controls, and capital requirements.
Georgia has a legal market for virtual assets, which is attractive to fintech companies. However, getting into this market requires much more effort than simply registering a company and launching your website.
Defining the service
In the framework outlined by PB Services, businesses providing covered services in the field of virtual assets for third parties are required to register as virtual asset service providers with the National Bank of Georgia.
The scope encompasses activities such as virtual-asset exchange and transfer, administration of trading platforms, and cryptocurrency custody or management. In addition, as per the information provided by the regulator, the custody concept includes administration of a customer’s private key and wallet.
That makes the technical design of a product in the crypto space relevant to its regulatory position.
A business owner who would like to get an crypto license in Georgia should map the customer journey proposed before formulating the request. What happens when the customer deposits their assets? Who is the person who controls the account? Can assets be traded or transferred? Who can authorise transactions?
Answers that are specific and clear can help decide what the company will be doing.
Your business plan should describe a real business
VASP applications need more than just a visually attractive pitch deck.
Based on the information provided, the National Bank expects a detailed business plan with financial projections covering at least three years, which includes costs, revenues, and growth projections. The plan should also show the intention to be a part of Georgia.
That requirement deserves attention early.
Investors may ask questions such as how quickly the business will expand. A business plan for an operation that is regulated must include information on how the operation will be conducted in a responsible manner.
Businesses that seek a vasp Georgia license must be prepared to link the commercial model and the compliance model, instead of treating the documents 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 main components of the preparation that is described by PB Services.
The material provided specifically warns that simply taking an AML policy from another state is insufficient because Georgian rules must be integrated into the firm’s structure.
The operational systems play a role also. The business plan should prove that the company’s system can detect potential suspicious transactions as well as related transactions.
Compliance needs to be an aspect of product development. It is not advised to build a platform before deciding on how AML policies are to be implemented. This could lead to unnecessary redesigns and delays.
The services you choose to use can Impact Your Capital
Determining the business model as early as possible is important for a number of reasons, not least the need for regulatory capital.
Based on the requirements set in the source material Exchange and transfer activities including kiosks, will require 150,000 GEL. The administration of platforms for trading requires 350,000 GEL, while other covered services need 250,000 GEL. The maximum threshold applies when multiple services are provided.
This is different from operating capital or capital invested. Evidence that the required amount was actually paid for is required with the application and the capital needs to be maintained throughout the course of operations.
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 compliance calendar does not expire with the approval. The requirements include regular obligations relating to risk management, cybersecurity and technological resilience. They also cover the retention of records, independent reviews customers’ complaints, retention of records.
For instance an independent auditor’s view regarding the risk-management framework has to be obtained within 12 months of the date of registration. Businesses also must follow the guidelines described regarding handling complaints. They are required to accept complaints, regardless of whether they be oral, written or electronic, to review them within a minimum of a one-month period, and provide data on complaints electronically to National Bank every month.
These aspects can alter the way a serious license applicant approach licensing.
Think of the Georgian VASP as a concept for a business rather than a set of forms that need to be filled out.
It is important that the company structure, technology, AML controls and regulatory capital, in addition to customer processes, are all in harmony.
Georgia is still a great location for crypto and fintech businesses. The framework for regulation provides an easily-defined route to the market. But asking about how quickly you can apply for a license is not the most effective way to start.
It’s describing in clear terms what your crypto business will be doing and proving that your business is prepared to do it within Georgia’s legal framework.