Georgia Announces Plans to Adopt Europe’s AML Laws

  • Georgia plans to be a major crypto hub by 2026.
  • The EU has intensified plans to prevent the use of crypto for money laundering and terrorism financing.

Georgia is stepping up its plans to become a global crypto hub by announcing new policies targeting crypto service providers in the country. Georgia, known as one of the most crypto-friendly nations, plans to coordinate local crypt laws in line with European Union directives.

The country’s Minister of Economy and Vice Prime Minister Levan Davitashvili revealed that Georgian lawmakers had sent a draft bill to the parliament containing new policies for digital businesses and crypto firms.

According to local sources, amendments to the bill are expected to be passed in a later session. Furthermore, the bill will align Georgia with the EU’s policies and directives, such as the Capital Requirements Directive (CRD), the Payment Services Directive (PSD2), and the Virtual Asset Service Provider (VASP) law.

The VASP law attempts to grant legal standing to organizations engaged in the exchange of digital assets. According to the report, the proposed policy will also restrict the use of cryptocurrency for crimes such as money laundering and terrorism financing.

Minister Davitashvili believes that accepting the VASP standards is essential for Georgia to secure long-term control of the crypto market. Davitashvili stressed the significance of aligning Georgia’s financial legislation with pertinent EU regulations.

Georgia is one of the growing numbers of countries that view cryptocurrency as part of their future. The eastern European nation prioritized digital assets in its development plans for 2022-2025. Georgia was named the fourth-most cryptocurrency-friendly jurisdiction as of July 2022 in a survey by Forex Suggest, behind Hong Kong, the US, and Switzerland. The historically-rich nation is known for having a lot of crypto ATMs, making it simple for consumers to convert cryptocurrency to fiat. 

EU’s AML Laws

The European Union announced plans to implement policies making it difficult for criminals to use cryptocurrency for illegal activities. Negotiators from the Council presidency and the European Parliament reached a provisional agreement in July on the proposal to modify the rules concerning the information that must be provided alongside financial transfers.

As part of the EU’s new policies, before making crypto-assets accessible to beneficiaries, crypto service providers will be required to confirm that the source of an asset is not subject to restrictions or sanctions and that there are no concerns about money laundering or terrorism funding 

 Despite the popularity of crypto assets, questions regarding their traceability and the risk of being used for illegal purposes have been a burden for regulators.

In accordance with the Financial Action Task Force’s (FATF) 2020 standardized guidelines, some countries have already taken steps to regulate cryptocurrency transfers to secure virtual assets from being used for terrorism and other related crimes.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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