The Legal Definition of Virtual Asset in Georgia: Why NFTs and CBDCs are Regulated Differently
- Tinatin Tolordava
- 6 days ago
- 11 min read
Table of contents
Why Georgia’s Virtual Asset Rules Matter More Than Ever
How Georgia Legally Defines a Virtual Asset
Why Virtual Assets Trigger Licensing in Georgia
Why NFTs Are Not Automatically Virtual Assets in Georgia
How Georgia Classifies CBDCs. Completely Separate from Virtual Assets
Why Georgia Regulates NFTs and CBDCs Differently
What This Means for Startups, Web3 Founders, Developers, and Investors
NFT Classification Scenarios in Georgia. When an NFT Becomes a Virtual Asset
CBDC Regulatory Rules in Georgia. Why They Are Completely Separate
When You Need a VASP License in Georgia. The Real Triggers
IE vs LLC. Which Structure Is Better for Virtual Asset Activity
Tax Rules for Virtual Assets vs NFTs in Georgia
SOCF Requirements for NFT Sellers and Crypto Platforms
Why Georgia Attracts Web3, NFT, and Virtual Asset Companies
Why Gegidze Is the Partner Web3 Businesses Choose
Frequently asked questions (FAQs)
Why Georgia’s Virtual Asset Rules Matter More Than Ever
Georgia has become a magnet for anyone working in Web3. Blockchain developers, NFT studios, crypto consultants, fintech founders, mining operators, and international investors choose Georgia because the regulatory environment is clearer, the taxes are lower, and the banking system is more open to crypto than most of Europe.
But the foundation of all crypto regulation in Georgia starts with one question.What exactly is a virtual asset according to Georgian law.
Georgia follows global FATF recommendations, but the government has added its own interpretations that directly affect crypto businesses, Web3 creators, NFT issuers, tokenized platforms, and anyone planning to obtain a VASP license Georgia or crypto license in Georgia.
Understanding this definition is essential. It decides whether your business needs a license or not. It decides how NFTs are classified. It determines whether your platform is regulated. And it clarifies why CBDCs sit in a completely separate category.
This article breaks down Georgia’s full legal definition of a virtual asset, explains how it differs from CBDCs and NFTs, and outlines what this means for startups, Individual Entrepreneurs, and LLCs working in crypto, gaming, fintech, and blockchain development.
How Georgia Legally Defines a Virtual Asset
Georgia uses a FATF based definition of virtual assets.
A virtual asset is any digital representation of value that:
Can be transferred
Can be stored
Can be traded
Is accepted as a medium of exchange
Is used for investment or payment
Exists in digital form
This definition covers:
Bitcoin
Ethereum
Stablecoins like USDT and USDC
Tokenized coins
DeFi tokens
Governance tokens
Utility tokens used for payments
Wrapped assets
Tokenized forex or commodities
Under Georgian law, these assets fall into the same regulatory bucket.If your business deals with transfer, exchange, custody, or safeguard of these assets, you may fall under the VASP regulatory framework.
CBDCs do not fall under this category.NFTs sometimes do, sometimes do not.And that difference changes everything.
Why Virtual Assets Trigger Licensing in Georgia
Georgia regulates virtual assets through the National Bank of Georgia.Any business that:
Exchanges virtual assets
Converts crypto to fiat
Holds client crypto
Safeguards private keys
Transfers crypto on behalf of users
Provides crypto wallet services
Facilitates peer to peer exchange
Maintains accounts that hold virtual assets
May automatically fall under the VASP category.
That is why businesses planning to operate at scale need to understand Georgia’s definition.If your digital asset is considered a virtual asset, then your company might need:
A VASP license Georgia
AML compliance
SOCF procedures
Banking approval
Enhanced KYC systems
Transaction monitoring obligations
One misunderstanding can turn a simple Web3 project into a regulated financial platform without the founder realising it.
Why NFTs Are Not Automatically Virtual Assets in Georgia
NFTs enter a special category.Georgia does not automatically classify NFTs as virtual assets.The classification depends entirely on their purpose.
NFTs that represent:
Digital art
Music
Collectibles
Gaming skins
Profile pictures
Tickets
Membership passes
Intellectual property
Are not considered virtual assets. They represent ownership or authenticity, not transferable financial value.
However, NFTs that function as:
Payment tokens
Yield generating assets
Fractionalized investment assets
Tokenized securities
Staking rewards
Financialized instruments
Exchangeable assets with market driven liquidity
May be classified as virtual assets.This is where NFT founders must be extremely careful.
If your NFT collection behaves like an investment, carries yield, or can be traded on secondary markets solely for financial incentives, the National Bank of Georgia may classify it as a virtual asset.This would trigger VASP rules.
If your NFT behaves like a digital collectible or artistic certificate, there is no VASP requirement.
This is the single biggest misunderstanding among NFT creators coming to Georgia.
How Georgia Classifies CBDCs. Completely Separate from Virtual Assets
CBDCs belong to a different legal category.Georgia treats a Central Bank Digital Currency as:
Legal tender
A sovereign currency
A digital representation of the Lari
A regulated monetary instrument
Part of the banking system
This is why CBDCs do not fall under the definition of virtual assets.Virtual assets are decentralized or privately issued.CBDCs are issued by the state through the National Bank.
This separation has strong consequences.
Businesses dealing with CBDCs do not need a VASP license
CBDC payments follow banking rules.
CBDCs are subject to standard AML laws
Not crypto specific licensing.
CBDCs interact directly with Georgian VAT, corporate tax, and IE taxes
Unlike crypto, which requires GEL valuation on payment day.
CBDCs do not require SOCF documentation
Banks already know the asset origin.
Georgia separates CBDCs from cryptocurrency because their risk categories are entirely different.This is why crypto firms are regulated.This is why CBDC fintech firms are not.
Why Georgia Regulates NFTs and CBDCs Differently
There are three main reasons.
Reason 1. NFTs vary in purpose
Some NFTs are art.
Some are financial instruments.
Some behave like securities.
Some behave like club memberships.
Georgia regulates the function, not the technology.
Reason 2. CBDCs are centralised
CBDCs are issued by the National Bank of Georgia.
They are not decentralized.
They are not private.
They are not speculative.
They fall under banking law, not VASP law.
Reason 3. Virtual assets can be used for payments
Any asset that can act as a medium of exchange falls under the virtual asset category.CBDCs already have legal currency status.NFTs often do not.
Georgia uses functional, not technical classification.This makes it easier for businesses to understand which rules apply to them.
What This Means for Startups, Web3 Founders, Developers, and Investors
The regulatory difference affects:
How you structure your company
Whether you need a VASP license
How you invoice clients
How you interact with Georgian banks
How you document SOCF
How you register tax residency
How you classify income under georgia country taxes
Whether you use an IE or LLC
Startups building NFT platforms must evaluate their model carefully.
Startups building DeFi tools almost always fall under VASP supervision.
Startups building CBDC infrastructure are treated as fintech providers, not crypto companies.
Freelancers using the IE model must know whether their work involves regulated virtual assets.
Georgia has one of the most flexible crypto environments in the region, but flexibility only works when you clearly match your business model to the correct category.
NFT Classification Scenarios in Georgia. When an NFT Becomes a Virtual Asset
Georgia does not regulate NFTs based on technology. It regulates them based on economic purpose. This is what makes the Georgian framework flexible for creators but extremely risky for NFT projects that unintentionally behave like investment tokens.
Below are the real world scenarios that determine whether an NFT is legally considered a virtual asset.
Scenario 1. Pure Art or Digital Collectible
If your NFT is:
Digital art
Music
Avatar
Collectible
Ticket
Access pass
Membership token
It is not a virtual asset.It functions like a digital certificate of authenticity.It is not used as payment.It is not used for financial gain.
Under Georgian law, collectible NFTs do not trigger VASP rules.You can sell them as an Individual Entrepreneur or LLC without licensing.
Keywords included. individual entrepreneur, georgia ie, georgia country taxes, crypto tax georgia.
Scenario 2. NFT With Utility but No Investment Value
NFTs that grant access to:
Private communities
Online content
In game features
Expensive club memberships
Events or experiences
Still remain outside the virtual asset category if there is no expectation of resale profit.
Utility alone does not make an NFT a regulated instrument.What matters is whether it acts like money or an investment.
Scenario 3. NFT That Generates Yield or Financial Returns
This is where it becomes regulated.
If your NFT earns:
Staking rewards
Yield
Passive income
Royalties
Revenue share
Ownership in an asset
It may legally be a virtual asset because it carries investment characteristics.
The National Bank of Georgia will likely classify it as part of the crypto asset family.That could trigger the need for:
VASP license Georgia
AML obligations
SOCF documentation
Transaction monitoring
Risk assessment systems
Bank compliance checks
Keywords included. vasp license georgia, obtaining a crypto license in georgia, crypto license georgia.
Scenario 4. NFT With Market Driven Liquidity
Some NFTs are intentionally structured to trade like tokens.They have:
Secondary liquidity pools
Automated buy and sell markets
Incentives to flip for profit
Built in economic value
Georgia will classify these as virtual assets because their commercial nature resembles fungible crypto.
Scenario 5. Fractionalized NFTs
Fractional NFT ownership often behaves like a security.If an NFT is split into smaller exchangeable parts, and each part carries economic value, this falls under virtual asset classification.
Fractionalization plus liquidity is one of the fastest ways for an NFT project to accidentally become a regulated financial product.
CBDC Regulatory Rules in Georgia. Why They Are Completely Separate
CBDCs sit in an entirely different legal and economic framework.
A CBDC is a digital form of the national currency.It is not speculative.It is not algorithmic.It is not decentralized.It is not privately issued.It is fully controlled by the National Bank of Georgia.
This means:
CBDCs are not virtual assets
They are regulated under banking law
They carry the same VAT rules as GEL
They follow the standard georgia country tax system
They do not require SOCF
They do not trigger VASP licensing
CBDCs are designed for stability, not speculation.This is why the Georgian system treats them separately.
When You Need a VASP License in Georgia. The Real Triggers
Understanding when your business becomes regulated is essential.Georgia is generous with tax rules and business freedom, but VASP licensing has strict boundaries.
You need a VASP license Georgia if your business performs any of the following:
Holding customer crypto
If your platform stores private keys or maintains wallets for users.
Exchanging crypto to fiat or fiat to crypto
Any automated or manual exchange service.
Exchanging one crypto asset for another
Even if the exchange is algorithmic.
Managing or safekeeping digital assets
Including custodial wallet services.
Facilitating peer to peer transfers
If users send funds through your platform.
Operating crypto ATMs
If they interact with the financial system.
Providing crypto payment processing for merchants
If you convert crypto to fiat on behalf of merchants.
Operating a marketplace for financial NFTs
NFTs with investment characteristics count.
If any part of your project touches client funds or performs exchange activities, you need licensing.
IE vs LLC. Which Structure Is Better for Virtual Asset Activity
Georgia offers two main structures for people working in crypto:
Individual Entrepreneur
LLC
They are taxed differently, regulated differently, and treated differently by the banking system.
Individual Entrepreneur (IE)
The IE model is ideal for:
Freelancers
Developers
Designers
NFT artists
Blockchain consultants
Crypto auditors
Web3 analysts
Smart contract engineers
If your income comes from foreign clients and your work does not involve managing virtual assets or client funds, you can legally use the 1 percent tax system under georgia small business status 1 percent tax turnover 500,000 gel 2025.
The IE model is not suitable when:
You hold client crypto
You operate a marketplace
You provide exchange services
You run a custodial wallet
You build financial NFT infrastructure
Those activities require an LLC and potentially a VASP license.
LLC
Use an LLC when:
Building a crypto business
Running a Web3 platform
Launching a DeFi project
Running an iGaming or fintech structure
Managing client tokens
Raising external capital
Hiring staff using Employer of Record Georgia
Applying for VASP licensing
LLCs benefit from the 15 percent corporate tax applied only on distributed profits.Reinvested profits are taxed at 0 until distributed.
Tax Rules for Virtual Assets vs NFTs in Georgia
Georgia tax law treats NFTs and virtual assets differently because of their economic function.
How Virtual Assets Are Taxed
If received as payment for services:
IEs pay 1 percent tax on foreign sourced crypto
LLCs pay corporate tax only when distributing dividends
VAT does not apply to foreign clients
Crypto must be valued in GEL on the date of receipt
SOCF is required for cashing out
If held as personal investment:
Virtual asset capital gains are tax free for individuals
No capital gains tax exists in Georgia
No wealth tax appliesKeywords included. crypto tax georgia, georgia crypto tax, georgia country taxes.
How NFTs Are Taxed
NFTs do not fall into one category because they vary in function.
If NFT is art
Taxed like digital art income.IEs pay 1 percent if the client is foreign.
If NFT is a membership pass
Taxed as service income.
If NFT is investment-like or financial
It may fall under virtual asset rules.It may require VASP licensing.It may require AML obligations.
If NFT is traded as a collectible
Classified as personal asset.NFT trading gains may be tax free if not business activity.
Taxation is always based on function, not technology.
SOCF Requirements for NFT Sellers and Crypto Platforms
Georgia uses SOCF rules to ensure that all funds entering Georgian banks have legitimate origins.If you receive payment through crypto, NFTs, token sales, or staking rewards, banks will ask for:
Wallet transaction history
Minting records
Marketplace sales logs
Exchange deposits and withdrawals
Buyer or seller information
IE turnover declarations
LLC accounting documentation
Income classification by Revenue Service Georgia
SOCF is especially important for:
NFT revenue
Crypto platform revenue
Token sales
Marketplace fees
DeFi protocol income
Mining rewards
Airdrops received as business income
Without SOCF, banks may freeze withdrawals.
Why Georgia Attracts Web3, NFT, and Virtual Asset Companies
Georgia is uniquely positioned because of the combination of:
Friendly tax rules
No VAT for foreign clients
No capital gains tax
Simple company formation
Fast banking
Low corporate obligations
Crypto tolerant compliance
Clear VASP licensing
Low cost of living
Strong English support
Strategic location
Access to top 10 banks in Georgia easily
Startups pay less tax.Founders gain clarity.Crypto businesses operate with transparency.Banks cooperate when SOCF is provided.Individuals benefit from 1 percent tax status.
Georgia effectively offers a hybrid environment. Part crypto friendly. Part regulated where needed. Perfect for serious Web3 builders.
Why Gegidze Is the Partner Web3 Businesses Choose
Gegidze supports crypto and Web3 clients in:
VASP licensing
Company registration in Georgia Tbilisi
Accounting for crypto transactions
NFT project structuring
IE registration with 1 percent tax
Banking setup and SOCF documentation
English to Georgian translation for compliance
Employer of Record Georgia for hiring
Tax residency planning
Full regulatory navigation
We help founders stay fully compliant while operating efficiently.
If you are building an NFT platform, crypto company, DeFi product, fintech tool, or any business connected to virtual assets, you need clarity on Georgia’s regulations.
We help you classify your project correctly, avoid licensing mistakes, and set up a legal structure that supports your growth in Georgia.
Frequently asked questions (FAQs)
Are NFTs considered virtual assets under Georgian lawNot automatically. NFTs that represent digital art, music, tickets, collectibles, or access passes are not treated as virtual assets. Georgia only classifies NFTs as virtual assets if they behave like financial instruments. For example, if an NFT provides yield, staking rewards, fractional ownership, or investment-style liquidity, it may fall under virtual asset rules and trigger the need for a VASP license Georgia.
Do CBDCs fall under the virtual asset definition in GeorgiaNo. CBDCs are considered digital legal tender issued by the National Bank of Georgia. They operate under banking law, not crypto regulation. CBDCs do not require VASP licensing, SOCF documentation, or virtual asset compliance, and they follow standard georgia country taxes and georgia country income tax rules.
Does my startup need a VASP license if I work with NFTs or tokensIt depends on the function of the asset. If your platform handles custodial wallets, exchange services, token swaps, crypto to fiat conversions, or peer to peer transfers, you may need a VASP license. If you issue art-based NFTs or utility NFTs without investment features, you do not need licensing. For regulated activity, the National Bank requires crypto license in Georgia compliance.
