Georgia Developing Crypto Regulations for the Crypto Markets – Says Georgian National Bank Governor

Georgia Developing Crypto Regulations

Welcome back to the Tribe! In this post we dive into the recent news of Georgia developing crypto regulations!

Nothing should be considered investment or financial advice. Enjoy the ride!

Georgia Developing Crypto Regulations

The National Bank of Georgia has prepared a first draft of policies designed to regulate the country’s cryptocurrency market. However, officials from the country’s central bank did not disclose a date for a parliamentary hearing.

While the little country by the black sea remains undecided on crypto regulations, Georgia has a significant stake in the world’s Bitcoin mining industry. The intersection jurisdiction accounts for around 1% of the global BTC hash rate by leveraging natural energy from hydropower facilities.

Recent reports indicate that as widespread cryptocurrency adoption continues to gain speed in mainstream sectors and space, more sovereign governments are fast-tracking efforts to establish a standardized market and enforce compliance with approved regulations..

Crypto Regulations on The Black Sea

Local media outlet The Financial reported on Tuesday (March 5, 2022) that Georgian central bank officials have written a draft of regulations geared toward providing sufficient oversight for the country’s growing crypto industry.

Koba Gvenetadze, Governor of the National Bank of Georgia revealed the news during an interview with the news house. Gvenetadze explained that although the country’s crypto market remains unregulated, Georgia continues to generate a significant monthly turnover in terms of transaction volume.

Citing data from a September 2020 report released by a Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), Gvenetadze highlighted that exchanges in the country facilitate around $1.2 million – $1.5 million in crypto transactions on a monthly basis.

Indeed, Georgian authorities recognize the growing use of crypto by investors and institutions. Similar to other jurisdictions, the country’s central bank is supposedly focused on protecting customers from unsafe investments while also encouraging digital innovation and compliance with international money rules.

Georgia Responds

Responding to a question regarding possible digital asset legislation, Governor Gvenetadze confirmed plans to introduce regulations. Gvenetadze said:

“Yes, the NBG is planning to regulate the crypto market in Georgia. To this regard, we have developed an initial draft of the relevant legislative changes in accordance with Financial Action Task Force requirements.”

Although work is underway for regulations, the central bank reportedly installed measures to mitigate any illicit activities. The NBG has prohibited all financial institutions including banks, fintech firms, and payment portals from doing business with any crypto exchange.

The order also stops money houses from opening accounts for digital asset companies and facilitating any off-ramp transactions for virtual asset service providers.

Furthermore, the NBG disclosed that authorities are collaborating with foreign market supervisors to develop comprehensive crypto policies.

“We are also benefitting from the technical assistance of the International Monetary Fund staff in the development of this regulatory framework. Draft of Legislative changes at this stage includes registration / licensing, compliance testing and AML control requirements for crypto market players.”

Finally, Governor Gvenetadze did not disclose when the draft will go through a hearing in the country’s parliament.

Georgia now joins a growing list of countries developing crypto regulations including the US, the UK, Russia, and Ukraine.

Other News – UK Adopts Stablecoins

In its move to make the UK a crypto hub, The government plans to amend the existing regulations and bring certain stablecoin payments into its regulatory purview.