It’s not enough precise to describe a regulatory application like “We’re creating our own cryptocurrency platform”.
Are customers able to exchange cryptocurrency for fiat? Can the platform allow the transfer of virtual assets? Does the company have control over client wallets and private keys? Are they administering an online asset lending platform, issuing tokens, or overseeing a trading system?
These differences are important when applying for an crypto-license in Georgia since the products and services a business plans to provide will affect its requirements for regulatory compliance documents, controls, and capital requirements.
Georgia may offer an attractive location for fintech firms however, entering the virtual-asset market today requires more than simply registering your company and launching a site.
First, define the service
Based on the model described by PB Services, businesses providing covered virtual-asset services for third parties are required to register as Virtual Asset Service Providers (ASP) with the National Bank of Georgia.
Included in the scope are the activities of virtual asset exchange and transfer and managing trading platforms and cryptocurrency management or custody. The information on regulation states that the custody concept extends to the administration of client’s private keys or wallet.
The technical design of a crypto product relevant to its regulatory status.
Anyone who wants to apply for the crypto licence in Georgia should sketch out the customer’s journey before preparing the application. What happens when a customer makes a deposit? Who owns your account? Are assets able to be exchanged or transferred? Which entity is authorized to authorize transactions?
The answers are clear and help determine the exact nature of what the business will be doing.
The business plan you create must outline the real-world business
VASP applications need more than a visually attractive pitch deck.
According to the information provided in the report, the National Bank requires a detailed business plan that contains financial projections covering at least three years. They include income, expense, as well as growth expectations. The plan must also demonstrate a real intent to operate within Georgia.
This is a need that must be addressed early.
Investors can ask questions like how quickly the business will expand. The business plan for regulatory compliance should also describe how the operation will 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 is not possible to add at the very end
PB Services describes the preparation as a series of steps that cover anti-money laundering, as well as anti-terrorism financing controls.
The information provided specifically warns against the importation of a policy regarding AML from a different state, since Georgian regulations need to be integrated into the overall framework of a firm.
The operating systems are essential. The business plan must demonstrate that the systems of the company is able to detect any suspicious transactions or those that may be related to them.
Practically speaking, compliance needs to influence the product’s development prior to its launch. First, establishing a platform and seeking out how AML procedures fit later will result in unnecessary redesigns and cause delays.
Capital Depends on the Services You Choose
Regulatory capital is another reason to define the business model early.
Under the thresholds provided in the sources, exchange and transfer activities such as kiosks, need 150,000 GEL. Trading platform administration is required to be 350,000 GEL and other covered services require 250,000 GEL. The most stringent thresholds apply when a variety of services are offered.
It is not the same as ordinary operating capital. The application must be accompanied by proof that the amount requested has been funded.
An entrepreneur who plans to submit an application for a crypto blockchain license in Georgia must consider the regulatory capital at the time of financial planning but not until the rest of the application has been completed.
Registration isn’t the end of compliance work
The calendar of compliance does not expire with the approval. The guidelines provide continuous obligations pertaining to risk management, cybersecurity, technological resilience and fraud risk, as well as record retention, independent review as well as customer complaints.
In order to receive an audit-free opinion from an independent source on the framework for risk management A company must sign up within 12 months. The guidelines for handling complaints oblige businesses to take complaints in written, oral or in electronic format, review them within a maximum of a month, and send complaint statistics electronically to the National Bank each month.
These particulars can alter the way that a serious license applicant approaches licensing.
Imagine an Georgian VASP Application as the design of an unregulated business.
The structure of the company, its service model and technology AML controls, regulatory capital procedures for risk, the company’s structure, and customer processes need to connect.
Georgia continues to provide opportunities for fintech and crypto businesses. Additionally, its regulatory framework offers a clear way to enter the market. The best place to start is not to ask what speed a license is going to come through.
It’s about being able to describe clearly what your cryptocurrency business plans to do and demonstrating that your business is prepared to operate within Georgia’s regulatory framework.