As one of the leading cryptocurrency-friendly nations in the post-Soviet region, Georgia is escalating its commitment to preventing money laundering activities.
The National Bank of Georgia (NBG) has set sights on initiating a rigorous investigation into virtual asset service providers (VASPs) from September 1st, 2023.
The move aims to fortify Georgia's compliance with anti-money laundering measures and adhere to global sanctions, particularly against Russia and Belarus.
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Archil Mestvirishvili, NBG's acting governor, recently highlighted the importance of these upcoming regulatory checks, which are expected to strengthen the nation's alignment with Western sanctions.
Mestvirishvili emphasized the bank's role in supervising compliance with these sanctions, pointing out:
We have created an additional department for monitoring sanctions. The enforcement of the sanctions is very important and the financial sector takes it very seriously.
Alongside the regulations, the NBG is also devising restrictions on foreign bank account holders. From September 1st, Russian citizens will face limitations, preventing them from withdrawing more than 20% of their savings instantly.
With the move, the bank aims to maintain Georgia’s economic stability amidst the rising foreign currency deposits by Russians. The bank believes that as this capital influx might be temporary, "it’s better to keep it in liquid funds."
This announcement comes as Georgia prepares to pass cryptocurrency-related legislation in the forthcoming autumn session. The draft bill on crypto regulation aims to align local laws with European Union directives and to confer legal status to entities engaged in digital asset trading.
The impending crypto regulations are expected to curtail crypto usage for illicit activities and bolster Georgia's position as a major global crypto hub. On top of that, one of the biggest stablecoin issuers, Tether, recently invested in CityPay.io, expanding its presence in the country.
