Georgia is planning to introduce laws to regulate the crypto industry in the country. Koba Gvenetadze, the Governor of the Central Bank of Georgia, in an interview revealed that new legislation has been drafted. The monetary authority has prepared the necessary amendments in line with the requirements of the intergovernmental Financial Action Task Force on Money Laundering (FATF).
Georgia’s Central Bank is receiving technical assistance from the IMF for the development of the regulatory framework. Gvenetadze highlighted that the draft legislative changes include registration and licensing, compliance testing, and AML control requirements. The rules are yet to be finalized.
Authorities in the Caucasus country have already introduced measures limiting the exposure of traditional financial companies to decentralized crypto assets. Companies are not allowed to provide digital currency exchange and transfer services. Gvenetadze said persons that conduct activities related to virtual assets should be classified by financial institutions as high-risk clients. It will be subjected to the appropriate enhanced preventive measures.
The crypto sector is not new to the European country, in fact, it has had a thriving crypto mining sector for quite some time. It accounts for about 1% of the total BTC hash rate. Georgia is renowned for its hydropower. The crypto sector hasn’t been regulated in the country. Moreover, Georgia doesn’t have an estimate of the current cryptocurrency turnover in the country. But as per Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval) report of September 2020, Georgia’s monthly crypto exchange transaction volume was between 3.5 and 5 million (around 1-1.5 million euros).
The regulatory push follows NBG’s plans to launch a digital version of the national fiat currency in 2022.