Georgia, one of the most crypto-friendly post-Soviet countries, is preparing to start supervising cryptocurrency companies in order to prevent money laundering and comply with sanctions.
The National Bank of Georgia plans to launch mandatory supervision of Virtual Asset Service Providers (VASPs) from September 1, 2023.
Acting NBG Governor Archil Mestvirishvili stated that the new regulatory measures will help the country combat money laundering, according to reported on May 31 the local news agency InterPressNews.
In line with anti-money laundering considerations, the upcoming VASP investigation is expected to increase the country’s compliance with Western sanctions against Russia and Belarus.
Mestvirishvili noted that the NBG is among the main authorities monitoring compliance with such sanctions. Surveillance was especially active last year, when global jurisdictions such as the United States and the European Union imposed sanctions against Russia.added:
“We have created an additional department to monitor sanctions. The application of sanctions is very important and the financial sector takes it very seriously.”
In addition to the supervision of VASPs, the BNG is also preparing to apply a series of important restrictions to holders of bank accounts abroad. As of September 1, Russian citizens will not be able to immediately withdraw more than 20% from their savings accounts.
According to the central bank, these measures are intended to support Georgia’s economic stability amid rising foreign currency deposits from Russians. “Since this capital inflow can be temporary, it is better to keep it in liquid funds,” would have declared the regulator.
The news comes amid the Georgian government’s preparations to pass cryptocurrency-related legislation in the fall session.. As previously reported, a local draft law on cryptocurrency regulation aims to align local laws with major European Union directives and provide legal status to entities involved in trading digital assets.
The upcoming cryptocurrency rules are also designed to prevent the use of cryptocurrency for money laundering and terrorist financing and help Georgia become a major global cryptocurrency hub.
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