According to a report in The Financial, citing the central bank’s governor, cryptocurrency exchanges in Georgia may soon be subject to government regulation.
Governor Koba Gvenetadze noted that the country’s crypto marketplaces handle GEL 5 million (US $1.6 million) in monthly transactions.
Gvenetadze claimed that the proposed legislation would contain provisions to register virtual asset service providers, conduct compliance checks, and stop money laundering.
The proposal will adhere to the Financial Action Task Force’s anti-dirty money standard, as well as receive technical support from the International Monetary Fund.
Conventional financial institutions, such as banks, have already been prohibited from providing crypto exchange services and have been strongly discouraged from doing business with crypto enterprises by the Central Bank.
The future law meets with international Financial Action Task Force (FATF) regulations, the central banker stated, and was drafted with support from International Monetary Fund (IMF) employees.
Currently, financial firms in Georgia are not permitted to offer virtual asset exchange and transfer services, and customers that participate in virtual asset activities are deemed high-risk and are subject to suitable additional preventative measures.
Gvenetadze did not indicate a deadline for the introduction of the regulatory law into parliament.
Crypto Mining in Georgia
Georgia has always had a crypto mining industry. It has sufficient hydropower, but electricity problems in the isolated Svaneti area throughout the winter were ascribed to illicit private crypto mining activity.
Desperate to limit the damaging habit, the national church stepped in to issue a spiritual admonition against it. Individual households in the area are offered electricity for free as part of an endeavor to maintain residents.