The application for regulatory approval should not include the statement “We are in the process of launching a cryptocurrency platform”.

Can users convert cryptocurrency into fiat? The platform will be able to transfer virtual assets? The company will be in control of client wallets or keys? Are they managing a lending platform for digital assets in the process of distributing tokens or managing a trading platform?

These differences matter when seeking permission to operate a cryptocurrency to operate in Georgia. The kind of services a business intends to offer determines the preparation of its regulatory documents control, documents, and capital requirements.

Georgia offers a regulated market for virtual assets that is attractive to fintech firms. However, gaining access to this market takes more effort than simply registering your business and then launching your website.

First, Define the Service

In the framework outlined by PB Services, businesses providing covered virtual asset services to third parties are required to register as virtual asset service providers to the National Bank of Georgia.

This includes transfer of virtual assets and exchange, administration of trading platforms, as well as management or custody of cryptocurrency. Importantly, according to the regulations provided the custody concept encompasses administration of the customer’s private key and wallet.

The technical design of the cryptocurrency product is important to its place in terms of regulation.

An entrepreneur who is interested in getting a crypto license in Georgia must therefore sketch out the intended customer journey prior to developing the application. What happens after a user deposits assets? Who manages your wallet? Are assets able to be traded or transferred? Which party is authorized to authorize transactions?

A clear understanding of the answers is helpful to establish what the firm will actually do.

Your business plan must detail the real-world business

VASP applications also require more than a stunning pitch deck.

The National Bank will expect a thorough business plan with financial projections for minimum three years. It should include revenue, expenses and growth expectations. The plan should also show the genuine intention to conduct business in Georgia.

That requirement deserves attention early.

A business plan written to be used by investors addresses concerns like how quickly the company’s growth rate can be accelerated. A regulation-based business plan should include a description of how the operation will function responsibly.

Businesses that seek a vasp Georgia license must be prepared to link to the commercial model as well as the compliance model instead of considering the two documents as separate documents.

AML Cannot be added to the end

PB Services has described the preparation process as a major part of which are the controls to stop financial crime and the financing of terrorists.

The material warns specifically that the importation of an AML Policy from another country won’t suffice since Georgian requirements must be incorporated into a company’s framework.

The operational systems must be considered as well. The business plan must prove that the company’s system can identify potential suspicious transactions as well as related transactions.

Practically speaking, compliance needs to influence the design of a product prior to launch. It is not recommended to build a platform before making a decision on how AML policies are to be implemented. This could result in delay and unnecessary changes.

Capital is contingent upon the services you select

Establishing the business’s model in the earliest possible time is crucial for a variety of reasons, such as regulatory capital.

According to the requirements in the source material, exchange and transfer, including kiosks, they must have at least 150,000 GEL. Management of platforms for trading needs 350,000 GEL while other covered services require only 250,000 GEL. If multiple services are offered the most appropriate threshold applies.

This is separate from ordinary capital for investment or operating. The proof that the amount requested is actually financed must accompany the request, and the capital should be kept all through the 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 formalization process.

The approval is not the point where the compliance calendar ceases to exist. The provided requirements detail the ongoing obligations for risk management and cybersecurity, technology resilience fraud risk as well as records retention, independent review and complaints from customers.

A risk-management framework, for example, requires an opinion by an independent auditor within a months from the date of registration. The guidelines for handling complaints stipulate that businesses must accept complaints in oral, written or electronically and examine them within a period of one month, and then provide the details of complaints electronically to National Bank each month.

These details can change the way in which a serious applicant approach licensing.

Instead of thinking of a Georgian VASP application as a set of forms required for obtaining permission consider it as a design for an authorized business.

A company’s structure, business model and technology, AML controls as well the procedures for risk, capital requirements and customer procedures must be consistent.

Georgia is still a great place for fintech and crypto businesses. The framework for regulation provides an easy path to market. The best way to begin is not to ask whether a license will come through.

It’s the ability, specifically, to explain what your crypto-related business will be doing and demonstrate that the company will be doing it in accordance with Georgia’s legal framework.