• Sat. May 21st, 2022

Georgia is now working on FATF-compliant digital currency regulations

ByHazel R. Lang

Apr 15, 2022

Georgia is set to become the latest country to comprehensively regulate its nascent digital currency industry. The central bank reveals that it has worked with international partners to draft a new bill that governs the industry.

In an interview with The Financial, the Governor of the National Bank of Georgia spoke about the state of the country’s financial industry at a time when its neighbor Russia is at war with Ukraine. Governor Koba Gvenetadze also spoke about the state of the local digital currency market and the regulator’s plans for the coming years.

On the magnitude of the digital asset market in Georgia, Governor Koba said, “Due to the fact that the VASP sector is unregulated at this point, we do not have accurate data on this issue.”

However, as noted by the Governor, a September 2020 report issued by the Committee of Experts on the Evaluation of Anti-Money Laundering and Anti-Terrorist Financing Measures found that monthly transaction volume is was between 1 and 1.5 million euros.

The Georgian digital asset market has been growing steadily for some time now, with its block reward mining growing even more aggressively. However, the government has yet to regulate the sector despite the growth. But as Governor Koba said, this lack of regulatory clarity will not last long.

“…NBG is considering regulating the crypto market in Georgia. In this regard, we have developed an initial draft of the relevant legislative amendments in accordance with the requirements of the Financial Action Task Force,” he noted.

Georgia is working with the Washington-based International Monetary Fund (IMF) to develop its regulatory framework. The IMF has not been the biggest supporter of digital currencies and has consistently sent out warnings against their adoption. More recently, he offered to bail out Latin America’s third-largest economy, Argentina, for $45 billion, but only on the condition that the government discourage the use of digital currency.

In February, the IMF claimed that Nigeria’s eNaira could be used for money laundering and terrorist financing. He has also always opposed El Salvador’s adoption of BTC as legal tender.

Although the upcoming regulations are the first for the country, the government has issued some guidelines in the past. It includes banning commercial banks from providing virtual asset exchange and transfer services as well as labeling digital asset traders as high-risk customers.

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