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- 1 Compulsory supervision of Virtual Asset Service Providers begins from September 1, 2023.
- 2 The National Bank of Georgia has initiated a probe on crypto firms to avoid money laundering and monitor compliance with sanctions.
Georgia is one of the most crypto-friendly countries, and it is now moving ahead to introduce new crypto regulations. By this, it is aimed to pursue a new aim to be a global crypto hub.
According to a local news agency, the new rule of supervision of Virtual Asset Service Providers (VASPs) is made compulsory from Sept 1, 2023. Archil Mestvirivili, Acting Governor and Vice Governor of the National Bank of Georgia (NBG), said this rule will help the country fight money laundering.
He further stated that the NBG is the main authority that will look into compliance with sanctions. He added that supervision was more active last year when the United States and European Union imposed sanctions against Russia.
NBG Enforces New Regulations
The NBG is imposing a set of regulations for foreign bank account holders. From September 1, Russians will not be permitted to withdraw more than 20% from their savings account immediately. Doing so will increase the economic stability of Georgia.
According to the central bank, increased foreign currency deposits may be of temporary nature; thus, it is better to keep it in liquid funds.
Georgia is involved in a beneficial tax system for businesses involved in the crypto field. It was estimated by the World Bank in 2018, at least 20,000 people in Georgia were involved in currency mining.
CBG Working Towards Crypto Market Utilization
The Central Bank of Georgia has already started working towards crypto market utilization. This includes registration, licensing, compliance testing, and anti-money laundering control requirements.
Some of the measures taken include a ban on financial institutions from providing virtual assets exchange and transfer services. One of the other measures is that people carrying out virtual asset activity will be considered high-risk clients, and enhanced preventive measures will be taken.
These measures are implemented to avoid the money laundering and financing of terrorism. Based on the 5th round Mutual Evaluation Report of Georgia published in September 2020, the evaluation was made on anti-money laundering (AML) measures and the financing of terrorism. The transaction is estimated between GEL 3.5 to 5 million euro per month.
AML includes a set of regulations, policies, and procedures designed to prevent cryptocurrency from being used for money laundering. Hence, the Central Bank of Georgia has launched an AML probe. Also, the VASP probe is assumed to increase the country’s compliance with Western sanctions against Russia and Belarus.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
