The NBG is working with the IMF and other international organizations to develop regulations that will help Crypto adoption in Georgia.
Gvenetadze, governor of the National Bank of Georgia said that they want to make sure that Crypto is “used for the right purposes.”
He also said that the NBG is looking at Crypto regulation in other countries, particularly in Europe.
They want to make sure that any regulations they put in place are effective and meet the needs of the people of Georgia.
The IMF has been supportive of Crypto regulation in general.
In a blog post, Tobias Adrian, Director of the Monetary and Capital Markets Department at the IMF, wrote that Crypto assets could help expand financial inclusion.
He also said that Cryptoassets could be used to facilitate cross-border transactions.
Trading Crypto in Georgia
While it is not yet possible to ascertain the number of people to be affected by these upcoming measures.
Gvenetadze explains the country does not yet have accurate figures on crypto behavior in Georgia.
The regulations will likely have an impact on cryptocurrency trading in Georgia.
Crypto exchanges will be required to register with the National Bank of Georgia.
And comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.
These are similar to the requirements that apply to traditional financial institutions.
The regulation of cryptocurrency exchanges is a positive step, as it will bring more legitimacy to the industry.
Crypto exchanges that are registered with the national bank will be subject to regular inspections.
This will help to protect investors and ensure that the exchanges are operating transparently and fairly.
It is also worth noting that, while crypto assets are not currently regulated by the Georgian government, tax laws do apply to gains from their sale.
Crypto traders labeled high risk
Gvenetadze explains that the NBG has already implemented certain countermeasures.
It appears to be concerned about crypto because of its potential to cause significant disruption.
The bank has prohibited Georgia’s financial institutions from providing cryptocurrency services.
The National Bank of Georgia also took steps against people who trade in digital assets (i.e. cryptocurrencies).
Financial institutions must label them as ‘high-risk’ and give them ‘appropriate enhanced prevention methods.’ This isn’t good news for investors in Georgia.
The Role of anti-money laundering organization
Gvenetadze appeals to international organizations for help in demonstrating his dedication.
They should assist Georgia with the crypto law revisions, he believes.
First, they created a draft under the Financial Action Task Force (FATF).
This is a group that develops anti-money laundering policies.
The IMF is also concerned with regulation.
The Financial Action Task Force (FATF), along with the International Monetary Fund (IMF), will assist Georgia in establishing regulations.
Given the organization’s track record, this could end badly for bitcoin investors, as it has previously counseled Argentina, El Salvador, and India not to start implementing legislation.
The IMF is presently involved in the development of legislative changes.
This includes registering and licensing, as well as compliance testing to ensure that it will operate.
Anti-money laundering controls for gamers in the crypto market are also part of this process.
To put things in place, time is required to clarify these rules, which have not been effected.
However, this does not in any way prevent the Georgian apex bank from making the reins of the crypto industry extra tight.
Currently, the Caribbean nation is one of the few countries that plan to control the crypto sector without sending companies away with rules.
The old Soviet state enacted a law eliminating VAT on crypto-related services in 2019.
Since virtually all nations are talking about crypto regulations, it will be interesting to see how this will eventually play out.