The VASP Law Explained: When Your Crypto Business Needs a License from the National Bank of Georgia (NBG)
- Tinatin Tolordava
- Nov 20
- 7 min read
Table of contents
Introduction: The Rise of VASPs and the Need for Regulation
The cryptocurrency industry has exploded globally, and Georgia is no exception. With its crypto-friendly tax policies, the country has become a hotspot for crypto businesses and investors.
However, as the industry grows, so do the regulations surrounding it. One key regulation that every Virtual Asset Service Provider (VASP) needs to understand is the licensing requirement from the National Bank of Georgia (NBG).
If you are running a crypto business in Georgia, it’s crucial to understand when you need a crypto license from the NBG and the implications of operating without one.
This blog breaks down the VASP law, explaining what it means for your business, when you need a VASP license Georgia, and the steps involved in obtaining it.
What is a VASP?
A VASP (Virtual Asset Service Provider) is any business or individual providing services related to virtual assets. This includes crypto exchanges, custodial wallet providers, and even platforms that facilitate the trading, transferring, or safekeeping of cryptocurrency.
Under Georgian law, a VASP is subject to certain regulatory requirements aimed at preventing money laundering and ensuring the integrity of the financial system.
The law ensures that companies operating in the crypto space are compliant with international standards while maintaining Georgia’s reputation as a safe haven for crypto business.
The Role of the National Bank of Georgia (NBG)
The National Bank of Georgia (NBG) is the regulatory authority responsible for overseeing financial institutions and ensuring the proper functioning of Georgia’s financial market. In 2019, the NBG introduced new regulations that specifically focus on virtual assets and crypto businesses. The goal was to bring the industry under a formal regulatory framework, offering both protection to investors and legitimacy to businesses.
For any crypto-related service in Georgia, it is essential to understand whether your company falls under the VASP definition and, if so, whether you need a crypto license.
When Does Your Crypto Business Need a VASP License?
The key question for many entrepreneurs in Georgia is: when do I need a VASP license from the National Bank of Georgia?
1. Crypto Exchanges
If your business operates a crypto exchange where users can buy, sell, or trade cryptocurrencies like Bitcoin, Ethereum, or stablecoins, you need to obtain a crypto license Georgia. This includes both centralized exchanges (CEX) and decentralized exchanges (DEXs) that offer matching services for crypto assets.
2. Custodial Wallet Providers
If your company holds custody of user funds in the form of cryptocurrencies, it’s considered a custodial wallet provider. This means your business is responsible for safeguarding digital assets on behalf of customers. As per the VASP law in Georgia, custodial wallet providers must apply for and obtain a VASP license to operate legally within the country.
3. Crypto Payment Processors
If you provide services that facilitate payments using cryptocurrency — for example, allowing merchants to accept crypto payments or facilitating cross-border transfers — you are also required to obtain a crypto license in Georgia. This also applies to businesses offering payment gateway services or crypto-fiat exchange services.
4. Crypto ATMs
Businesses that operate crypto ATMs or machines that allow users to buy and sell crypto in exchange for fiat currency are classified as VASPs under Georgian law. To ensure compliance, these businesses need a VASP license from the National Bank of Georgia.
5. Issuance of Stablecoins or Tokens
If your company is involved in the issuance, creation, or management of tokens or stablecoins, it must obtain a VASP license Georgia to comply with local regulations. This includes businesses offering services like token issuance, ICOs, or security token offerings (STOs).
Why Do You Need a VASP License from the National Bank of Georgia?
There are several important reasons why obtaining a crypto license in Georgia is critical for your business:
1. Legal Compliance
The VASP law ensures that your business complies with anti-money laundering (AML) and know-your-customer (KYC) standards. Operating without the necessary license could expose you to legal and financial risks. The National Bank of Georgia monitors crypto operations to ensure that they meet these standards and international obligations.
2. Access to Banking Services
Without a VASP license Georgia, your business may face challenges in establishing relationships with Georgian banks. Banks like Bank of Georgia and TBC Bank typically require KYC-compliant businesses before they offer banking services. Having a VASP license is a key requirement for bank account setup, making it essential for your crypto business to function smoothly.
3. Enhanced Credibility
A crypto license not only helps your business remain compliant but also boosts your credibility with clients, investors, and partners. It demonstrates that your business is legitimate and adheres to the highest regulatory standards, making it more attractive to potential investors or stakeholders.
4. Protection for Clients
When you obtain a VASP license in Georgia, you help ensure that your clients’ funds are secure and that your operations are transparent. Licensed VASPs must follow clear procedures for user protection, financial transparency, and fraud prevention.
How to Apply for a VASP License in Georgia
The process for obtaining a VASP license in Georgia involves several steps:
Step 1: Determine Eligibility
Before applying for a crypto license in Georgia, ensure that your business fits the VASP definition. If you’re operating a crypto exchange, wallet provider, or similar crypto service, you’re likely eligible.
Step 2: Prepare Required Documentation
To apply for a VASP license Georgia, you need to submit the following documents:
Business registration certificate.
Information about your company’s structure, shareholders, and management.
Proof of operational policies and procedures for KYC, AML, and customer protection.
Compliance framework detailing how your business adheres to Georgian and international financial regulations.
Step 3: Submit Your Application
Once your documents are in order, submit your application to the National Bank of Georgia. The process can take anywhere from a few weeks to several months, depending on the complexity of your business and the documentation provided.
Step 4: Await Approval
Once your application is reviewed, the National Bank of Georgia will decide whether to approve or reject your application. If successful, you will receive your crypto license and be able to operate legally within the country.
Risks of Operating Without a VASP License
Operating without a crypto license in Georgia can lead to serious consequences:
1. Legal Penalties
Businesses that fail to obtain a VASP license Georgia face potential fines, suspension of operations, and legal action from Georgian authorities.
2. Banking Issues
Without the proper license, you may find it difficult to establish a relationship with local banks or open a business bank account. This could lead to delays in your operations, difficulty processing transactions, and a lack of access to Georgia’s banking infrastructure.
3. Reputational Damage
Operating outside the legal framework could damage your business’s reputation. Investors, partners, and clients are more likely to trust licensed crypto services, which adhere to the highest compliance standards. Unlicensed operations may deter potential business and investment opportunities.
How Gegidze Helps with VASP Licensing in Georgia
At Gegidze, we specialise in assisting businesses through the process of obtaining a VASP license in Georgia. Here’s how we help:
Advisory services: We provide guidance on how to structure your business to meet VASP licensing requirements.
Document preparation: Gegidze assists in preparing and submitting the necessary documentation for your crypto license application.
Compliance support: We ensure your business remains compliant with Georgia’s AML and KYC regulations.
Banking and licensing coordination: We help you establish connections with Georgian banks to ensure smooth financial operations.
Conclusion: Why Georgia is the Ideal Location for Your Crypto Business
Georgia is one of the most crypto-friendly countries in the world, offering zero tax on crypto capital gains and simple regulatory frameworks for businesses. However, if you’re providing crypto services or managing crypto assets on behalf of clients, obtaining a VASP license is essential to stay compliant and ensure your business remains legitimate.
Whether you are running a crypto exchange, offering wallet services, or involved in crypto mining, Georgia’s VASP licensing system provides the legal clarity and protections you need to operate confidently.
Gegidze is here to help guide you through the crypto licensing process, ensuring that your business meets all regulatory requirements while enjoying Georgia’s tax advantages.
Ready to get started on your VASP licensing in Georgia?
We’ll help you understand the process, prepare your application, and ensure that your crypto business operates legally and profitably in Georgia.
Frequently Asked Questions (FAQs)
What is a VASP license, and why does my crypto business need one in Georgia?
A VASP license (Virtual Asset Service Provider license) is required for businesses operating in the crypto sector, including crypto exchanges, wallet providers, and payment processors. If your crypto business involves facilitating or managing cryptocurrency transactions in Georgia, you need a VASP license to comply with National Bank of Georgia (NBG) regulations.
How do I obtain a crypto license in Georgia?
To obtain a crypto license in Georgia, you must submit an application to the National Bank of Georgia (NBG). The process includes providing documentation about your company’s structure, compliance policies, and the services you offer. Gegidze can guide you through the application process, ensuring all documents meet Georgian regulatory standards.
Can I operate a crypto business in Georgia without a VASP license?
No. If you are involved in providing crypto services like trading, wallet management, or crypto payments, you must have a VASP license from the National Bank of Georgia. Operating without a license can result in penalties and suspension of your services.