The regulation application should not include the phrase “We are creating a cryptocurrency platform”.
Can customers convert cryptocurrency to fiat? Will the platform be able to move virtual assets? Does the company control over client wallets as well as private keys? Do they manage a lending platform for digital assets that issues tokens or running a trading system?
These differences are important when seeking a crypto license in Georgia because the services a company intends to provide affect its regulatory preparation, documentation, controls, as well as capital requirements.
Georgia could be a desirable location for fintech firms however, gaining access to its controlled virtual-asset marketplace now requires more than registering a company and creating a web site.
First, you need to define the service.
Under the framework described by PB Services, businesses providing covered services in the field of virtual assets for third parties must register as Virtual Asset Service Providers with National Bank of Georgia.
This includes transfer of virtual assets and exchange, administration of trading platforms, and the management or custody of cryptocurrency. According to the regulatory information supplied the concept of custody encompasses management of a client’s personal key and wallet.
This is what makes the design of a crypto-product relevant to its legal status.
Anyone who wants to apply for the crypto licence in Georgia should map the customer journey proposed before preparing the application. What happens after a customer deposit funds? Who owns the wallet? The assets can be transferred or exchanged? Who is the entity that is able to authorize a transaction?
Questions that are precise and clear help determine what the business will be doing.
The business plan you create must outline the actual business
A VASP application also needs more than an attractive pitch deck.
According to the information supplied according to the information provided, according to the information provided, National Bank requires a detailed plan of business with financial projections for at least three years. This includes income, expense, as well as growth expectations. The plan should also show an actual intention to operate in Georgia.
It is essential to deal with this issue as soon as you can.
Investors can ask questions like what speed the company will grow. The business plan of an operation that is regulated must include details about how it will be run safely.
If a company is seeking a vasp license Georgia applicants must be able to connect the commercial model to the compliance model rather than treating them as unrelated documents.
AML can’t be added at the end
PB Services describes the preparation as a series of steps which include anti-money laundering and counter-terrorism controls.
The document specifically warns against importing policies on AML from a different state, since Georgian AML regulations must be integrated into the framework of a firm.
Additionally, the operational systems are crucial. The business plan needs to prove that the company’s system can detect potential suspicious transactions as well as related transactions.
Practically, the quality of a product has to influence its development before it is released. It isn’t a good idea to develop a platform without deciding on how AML policies will be applied. This could lead to unneeded redesigns and delays.
The Services You Select Can affect your capital
The business model should be determined as early as possible is important for a number of reasons, including the requirement for capital.
According to the criteria set out in the source material, exchange and transfer, including kiosks are required to be at or near 150,000 GEL. Management of trading platforms requires 350,000 GEL while other covered services require only 250,000 GEL. When multiple services are provided the most relevant threshold is the one to be used.
This is distinct from normal operating or investment capital. A proof that the amount has actually been funded must be included with the application and the capital must 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 isn’t enough to complete the Compliance Work
The calendar of compliance doesn’t end with approval. The requirements listed in the document outline the ongoing obligations for cybersecurity and risk management technology resilience and risk of fraud and record retention, independent review and complaints from customers.
A risk-management system is one example. It requires an opinion from an independent auditor within a month of registration. In accordance with the regulations, businesses must accept complaints either in writing or in oral form and examine them within a month. They are also required to submit statistics on complaints to the National Bank electronically each month.
These aspects affect the way serious applicants should approach licensing.
Instead of thinking of a Georgian VASP application as a set of forms required to obtain permission imagine it as a design for an regulated business.
A company’s structure, service model, and technological capabilities, AML controls as well the procedures for risk, capital requirements and customer processes must all be consistent.
Georgia offers opportunities to businesses in the field of fintech and crypto and the legal framework gives an easy way to enter the market. But the most effective starting point isn’t asking how quickly the license will be granted.
It is essential to explain in detail how your crypto-business will do, and demonstrate that you’re able to comply with Georgia’s rules.