The regulatory application should not include the following statement “We are setting up a platform for cryptocurrency”.
Are customers able to exchange cryptocurrency in exchange for fiat? Can the platform be used to move virtual assets? The company will be in control of wallets for clients or keys? Is it planning to run an exchange platform or lend against digital assets?
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 has a legal market for virtual assets, which attracts fintech companies. However, gaining access to this market takes more effort than simply registering a company and launching a website.
First, let’s define the service.
According to the guidelines set forth by PB Services, businesses providing covered virtual-asset services for third parties are required to register as virtual asset service providers with National Bank of Georgia.
Included in the scope are things like virtual transfer and exchange of assets along with management of trading platforms and custody management for cryptocurrency. The regulations state that the custody concept extends to the administration of the client’s private keys, or wallet.
That makes the technical design of a product in the crypto space important to its position in the regulatory system.
An entrepreneur who is interested in getting a crypto license in Georgia must therefore sketch out the customer journey they intend to take before preparing the application. What happens when the customer makes a deposit of their funds? Who manages the wallet? The assets can be exchanged or transferred? Which entity is authorized to authorize transactions?
It is important to be clear in your answers to determine what the company will do.
Your Business Plan Needs to describe a real business
A VASP application requires more than an attractive pitch deck.
According to the information supplied, the National Bank requires a detailed plan of business with financial projections covering a minimum period of three years. These include expenses, revenue, and growth projections. The plan should also show an actual intention to be a part of Georgia.
This is a problem that deserves to be addressed quickly.
A business plan written for investors can answer questions such as: How fast will the company expand? The business plan of the regulatory process must include details about how it will be run responsibly.
For businesses that are looking for a license to use vasp Georgia applicants must be able to link the commercial model with the compliance model instead of considering them separate documents.
AML Cannot Be Added at the end
The Anti-Money Laundering as well as the Counter-Terrorism Controls on financing are among the most important components of the plan described by PB Services.
The information provided specifically warns against simply importing a policy on AML from a different country because Georgian regulations need to be incorporated into the framework of a business.
It is also essential to think about the operational systems. The business plan needs to show that the system is able to identify potentially suspicious and related transactions.
It is essential to consider compliance as a consideration in product development. By building a platform and then determining how AML can be implemented and how it will work, you could cause inefficient delays and have to redesign.
The services you select can Impact Your Capital
The need to develop an early business model is also due to capital required by the regulatory authorities.
Based on the requirements set in the sources Exchange and transfer activities, including kiosks, require 150,000 GEL. Trading-platform management requires 350,000 GEL and other services covered are only required to be 250,000 GEL. The highest threshold applies when multiple services are provided.
This is different from normal operating capital or investment capital. A proof that the requested amount is actually funded should accompany the request. Additionally, the capital must be maintained throughout operation.
The founder who wants to get a crypto-blockchain license in Georgia should consider the regulatory capital in his budgeting and not wait until the other aspects have been taken care of.
Registration doesn’t end the task of ensuring compliance.
The compliance calendar will not disappear after approval. The guidelines outline the ongoing obligations for risk management and cybersecurity, technology resilience, fraud risk and records retention, independent review and customer complaints.
For instance an opinion of an independent auditor on the risk management framework should be obtained within 12 months from the time of registration. In accordance with the regulations, companies must take complaints written or verbally and examine them within a month. Additionally, they must send statistics of complaints to the National Bank electronically each month.
These details can change the way in which a serious applicant approach licensing.
Think of the Georgian VASP as a concept for a company rather than a set of forms to be filled out.
It is important that the organization’s structure along with the technology, AML controls and regulatory capital, along with processes for customers, are in harmony.
Georgia is a fantastic location for crypto and fintech companies. The framework for regulation provides a well-defined path to the market. However, asking about the speed at which you can apply for a license isn’t the best way to begin.
It’s explaining, in precise terms, the things your crypto company will be doing and proving that the business is ready to conduct it within the Georgian legal framework.