There have been rumors that Georgia might be announcing Bitcoin as a legal tender soon. However, it seems that the National Bank of Georgia will regulate cryptocurrencies and not very positively. The policies are going to be strict and could affect the adoption rate in the nation. Financial institutions in the country have already been banned from offering crypto services to citizens. So, for the same, a licensing structure might be implemented which will only allow approved companies to do business in the country.
National Bank of Georgia will regulate cryptocurrencies
The Financial regulator in Georgia has drafted regulations that will allow the monetary authority to bring new rules and regulations to the country’s crypto sector. There have been amendments made based on the country’s money-laundering prevention requirements, said an official. They are even being assisted by the International Monetary Fund (IMF) to develop their crypto framework. This solidifies the idea that Georgia making BTC legal tender was really just a rumor.
Other than the money-laundering requirement, registration and licensing are some aspects that the bank is focusing on. Till the time the framework is ready, the authorities have also limited the exposure of traditional finance companies to Decentralize crypto finance assets. The governor has also asked the companies to classify clients dealing with crypto as high-risk clients and take measures accordingly.
Georgia’s crypto adoption
While the authorities have not commented on the crypto sectors’ size because of their regulated nature, we have some data on the same. A report from Moneyval suggests that the crypto exchange transaction volume in Georgia is around $1.09 million to $1.63 million.
It has also been estimated that only 2.89% of the country’s citizens own cryptocurrency. However, due to the cheap cost of electricity in the country, the mining business was great there. In fact, it was the second-largest country in mining after China. But the strong policies have now pushed miners out of the country. There have also been reports that Georgia is going to launch its own central bank digital currency (CBDC) in 2022.
It’s very unlikely for a small nation to have such strict measures of crypto. What are your thoughts on the National Bank of Georgia as it plans to regulate cryptocurrencies? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.