Starting on September 1, 2023, the National Bank of Georgia (NBG) will impose mandatory supervision of virtual asset service providers (VASPs). Georgia, a cryptocurrency-friendly nation, aims to halt money laundering and adhere to international sanctions through new regulations.
Acting NBG governor Archil Mestvirishvili stated that new regulatory measures would strengthen anti-money laundering efforts. InterPressNews reported this information on May 31.
It is expected that the oversight of VASPs will enhance Georgia’s compliance with Western sanctions by addressing anti-money laundering concerns. These measures particularly target nations such as Russia and Belarus. Mestivirishvili emphasized that the NBG has the responsibility to ensure the compliance with these sanctions.
“We have created an additional department for monitoring sanctions. The enforcement of the sanctions is very important and the financial sector takes it very seriously.”
The NBG intends to put considerable limitations on owners of overseas bank accounts in addition to the VASP oversight. Russian nationals will only be able to take a maximum of 20% of their funds out of their accounts instantly as of September 1.
The central bank intends these steps to support Georgia’s economic stability amid the increasing inflow of Russian foreign currency deposits. The regulator stated, “We believe it is better to keep this capital inflow in liquid funds due to its potentially temporary nature.”
The NBG’s decision to regulate and oversee cryptocurrency firms demonstrates Georgia’s commitment to financial stability and international standards. Imposing requirements on owners of foreign bank accounts further reinforces this commitment. Georgia actively regulates cryptocurrency firms and imposes obligations on foreign bank account owners to maintain financial stability and adhere to international standards. The NBG’s actions reflect Georgia’s dedication to ensuring a secure environment for digital assets and cross-border transactions.
The announcement comes as Georgia’s legislature gears up to pass legislation about cryptocurrencies during the upcoming fall session. A local draft bill aims to align Georgian legislation with EU regulations on cryptocurrency. It also intends to provide legal recognition to businesses involved in digital asset trading.
Future crypto regulations may inadvertently aid Georgia in becoming a major global hub for money laundering and terrorism financing.