The regulatory application shouldn’t contain the words “We are creating a cryptocurrency platform”.
Customers can exchange cryptocurrency in exchange in exchange for fiat? Will the platform transfer virtual assets? Can the company manage client wallets or private keys? Will it manage a trading platform or lend against digital assets?
These differences are important when seeking an crypto license in Georgia due to the services that a company is planning to provide will impact its preparation for regulatory compliance documents, controls, as well as capital requirements.
Georgia offers a market that is regulated for virtual assets that is appealing to fintech companies. However, entering this market is more work than simply registering your business and launching your website.
Definition of the scope of service
Businesses that offer virtual-assets services to third party clients must be registered as Virtual Asset Service Providers (VASP) at the National Bank of Georgia under the rules laid out by PB Services.
This covers virtual asset transfer and exchange, administration of trading platforms, and management or custody of cryptocurrency. Importantly, according to the information provided by the regulator the concept of custody includes administration of the customer’s private keys and wallet.
The technical design of the cryptocurrency product is important to its place as a result of regulations.
A founder interested to obtain the crypto licence in Georgia should map the customer’s journey in formulating the application. What happens after the client transfers their money? Who is the person who controls the wallet? Can assets be transferred or exchanged? Which entity is authorized to authorize the transaction?
Clarity in the answers helps to establish what the firm is actually doing.
Your Business Plan must describe a real business
VASP applications require more than a stunning pitch deck.
According to the supplied information The National Bank expects a detailed business plan containing financial projections of at least 3 years, which includes revenue, expenses, and growth projections. The plan must also demonstrate the intention to conduct business within Georgia.
It is essential to deal with this issue as soon as is possible.
Investors may ask questions such as how fast the business will grow. The business plan that is regulated must be able to describe how the company will run in a responsible manner.
Georgian applicants for a vasp license shouldn’t view the commercial model as though they were not connected. Instead they should join them.
AML is not able to be added at the end
PB Services has described the procedure of preparation as a significant part of it is the controls against money laundering and terrorist financing.
The material provided specifically warns that just the import of an AML policy from another country is insufficient because Georgian requirements need to be incorporated into the company’s structure.
It is equally important to think about the operational systems. The business plan needs to demonstrate that the company’s system can detect similar and suspicious transactions from the outset.
In practical terms the compliance process should influence product development before launch. In the process of creating a platform and then determining the way AML will work and how it will work, you could cause unnecessary delays and even redesign.
The Services You Select Can Change Your Capital
The necessity of establishing an early business model is also due to regulatory capital.
According to the requirements in the source materials for transfers and exchanges, including kiosks have to be at or near 150,000 GEL. Trading-platform administration is required to be 350,000 GEL, while other covered services require 250,000 GEL. If several services are offered the threshold which is highest applies.
It’s not as simple as operating capital that is used for normal purposes. The application must be accompanied by proof of the amount requested was financed.
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 Finish the Compliance Work
Approval is not the point where the compliance calendar disappears. The guidelines provide the ongoing obligations in risk management, cybersecurity technological resilience, fraud risk, record retention, independent review, and customer complaints.
In order to obtain an independent audit opinion regarding the risk management framework, a company must register within 12 months. The guidelines for handling complaints oblige businesses to take complaints in oral, written or in electronic format, examine them within a period of a month, and submit data on complaints electronically to National Bank each month.
Those details change how an experienced applicant approaches licensing.
Imagine the Georgian VASP as a visual design for a company instead of a collection of forms to fill out.
The structure of the business, the service model, technology, AML controls, capital regulations processes, risk management, and the customer’s processes must be able to work together.
Georgia is a good location for crypto and fintech companies. The regulatory framework it has provides an easy path to market. The best place to start is to not ask about how fast a license can be issued.
You should be able to explain in detail how your business’s crypto-related activities will be and prove that you’re able to comply with Georgia’s rules.