Georgia aims to adopt European crypto standards for anti-money laundering

One of the nations that is most welcoming to cryptocurrencies in the world, Georgia, is moving to enact new crypto rules in order to further its goals of becoming a major cryptocurrency hub.

According to Georgian Vice Prime Minister and Minister of Economy Levan Davitashvili, lawmakers in the country have drafted a new legal framework aimed at regulating cryptocurrency trading and digital business in Georgia.

According to Davitashvili, a draught bill has been forwarded to the legislature, and it is anticipated that the revisions will be approved during the upcoming fall session, according to a story published on Monday by the regional news source Business Media Georgia.

The Payment Services Directive (PSD2), the Capital Requirements Directive (CRD), and the Virtual Asset Service Provider (VASP) statute are the three primary European Union directives that the draught bill seeks to align with in order to ensure compliance with local cryptocurrency laws.

The VASP law attempts to grant legal standing to organisations engaged in the exchange of digital assets. According to the report, the new framework will also stop cryptocurrency use for money laundering and terrorism financing.

In order for Georgia to secure long-term control of the cryptocurrency industry, Davitashvili believes that acceptance of the VASP standards is essential. According to reports, the minister stressed the significance of aligning Georgia's financial legislation with pertinent EU regulations. The latest framework is only the first step as Georgia aims to become a crypto hub in the future, in line with the government’s official 2022–2025 development strategy.

Georgia has emerged as one of the most crypto-friendly countries in the world. In a study by Forex Suggest, Georgia was ranked the fourth most crypto-friendly jurisdiction after Hong Kong, the United States and Switzerland as of July 2022. Georgia is specifically associated with a high density of crypto ATMs, allowing users to easily buy and sell crypto in exchange for cash. According to data from CoinATMRadar, Georgia hosts 45 crypto ATMs at the time of writing.

Lawmakers in Georgia have been working on cryptocurrency legislation this year, with central bank governor Koba Gvenetadze noting the lack of crypto regulation in the country in April. The first reports on Georgia’s upcoming new crypto rules came as tens of thousands of Russians flee to Georgia due to Western sanctions on Russia and uncertainty about the economy. Crypto apparently became an important tool for many Russians arriving in Georgia to handle their finances amid sanctions on credit and debit cards.