Georgia
Retail_Trading_Status
- Analysis ID
- #667
- Version
- Latest
- Created
- 2025-12-12 04:19
- Run
- e2e21d08...
- History
- View all versions
- Workflow Stage
- Step 1
Executive Summary
Retail cryptocurrency trading is legal and explicitly regulated in Georgia under the supervision of the National Bank of Georgia (NBG). A mandatory registration regime for Virtual Asset Service Providers (VASPs) has been in force since July 1, 2023, requiring all crypto intermediaries to register and comply with AML/CFT standards. While cryptocurrency is not legal tender and direct payments with assets are restricted, individuals enjoy a highly favorable tax environment with a 0% capital gains tax on crypto profits.
Key Pillars
National Bank of Georgia (NBG) - Primary regulator responsible for VASP registration and supervision
Mandatory VASP Registration - All crypto exchanges and wallet providers must register with the NBG
AML/CFT Compliance - VASPs must adhere to the Law on Facilitating the Prevention of Money Laundering
Travel Rule - Implementation of FATF Travel Rule requirements for transfers
Territorial Tax Regime - Individuals are exempt from tax on crypto gains as they are considered non-Georgian sourced income
Landmark Laws
Organic Law of Georgia on the National Bank of Georgia (Amendments regarding VASPs) - Enacted: 2023-01-01
- Establishes the legal definition of Virtual Assets and grants the NBG supervisory authority over the sector.
- Source
Order No. 94/04 of the Governor of the National Bank of Georgia (Order No. 94/04) - Enacted: 2023-06-13
- Defines the specific rule for VASP registration, cancellation, and regulation, effective from July 1, 2023.
- Source
Law on Facilitating the Prevention of Money Laundering and the Financing of Terrorism - Enacted: 2019-10-30
- Classifies VASPs as 'obliged entities' subject to reporting and due diligence requirements.
Considerations
Tax Exemption: Individuals pay 0% tax on crypto capital gains because the income is treated as 'sourced from virtual space' rather than Georgian territory.
Not Legal Tender: Virtual assets cannot be used as a direct means of payment for goods and services, though VASPs can facilitate conversions.
Corporate Tax: Legal entities (LLCs) are subject to a 15% corporate income tax only upon the distribution of profits (Estonian model).
Registration Requirement: Operating a crypto business without NBG registration is illegal and subject to heavy fines.
Notes
It is crucial to distinguish between the country Georgia and the U.S. state of Georgia. Recent news regarding 'HB 1053' banning CBDCs applies to the U.S. state, not the country. The country Georgia is actively exploring CBDC (Digital Lari) pilots.
Remaining Uncertainties
- Specific enforcement actions against unregistered foreign exchanges targeting Georgian users remain undocumented.
- The practical implementation of the Travel Rule for small transfers is still evolving.
Detailed Explanation
Detailed Explanation
Retail cryptocurrency trading is legal and explicitly regulated in Georgia. The regulatory framework is centered on the National Bank of Georgia (NBG) as the primary supervisory authority, empowered by amendments to the Organic Law of Georgia on the National Bank of Georgia enacted on January 1, 2023. This law provides the legal definition of Virtual Assets and formally grants the NBG oversight of the sector. A cornerstone of the regime is the mandatory registration for all Virtual Asset Service Providers (VASPs), including exchanges and wallet providers, which has been in force since July 1, 2023. The specific rules for this process are detailed in Order No. 94/04 of the Governor of the National Bank of Georgia from June 13, 2023. Operating without this registration is illegal and subject to significant penalties. All registered VASPs are classified as 'obliged entities' under the Law on Facilitating the Prevention of Money Laundering and the Financing of Terrorism of October 30, 2019, and must therefore comply with stringent Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) standards, including the implementation of the FATF Travel Rule for transfers. While the ecosystem is regulated for intermediaries, individuals benefit from a highly favorable tax environment. Capital gains from cryptocurrency are exempt from tax for individuals, as this income is treated as non-Georgian sourced, originating from 'virtual space.' However, a key restriction exists: virtual assets are not legal tender in Georgia and cannot be used directly as a means of payment for goods and services, though VASPs can legally facilitate conversions to and from the national currency.
Summary Points
I. Regulatory Status
- Retail cryptocurrency trading is Allowed-Regulated.
- It is legal and operates under an explicit regulatory framework supervised by the National Bank of Georgia (NBG).
- A mandatory registration regime for all Virtual Asset Service Providers (VASPs) has been active since July 1, 2023.
II. Key Regulatory Bodies
- National Bank of Georgia (NBG): The primary regulator responsible for VASP registration, supervision, and oversight of the cryptocurrency sector.
III. Important Legislation
- Organic Law of Georgia on the National Bank of Georgia (Amendments regarding VASPs): Enacted on January 1, 2023. This law establishes the legal definition of Virtual Assets and grants the NBG supervisory authority over the sector.
- Order No. 94/04 of the Governor of the National Bank of Georgia: Enacted on June 13, 2023. This order defines the specific rules for VASP registration, cancellation, and regulation, effective from July 1, 2023.
- Law on Facilitating the Prevention of Money Laundering and the Financing of Terrorism: Enacted on October 30, 2019. This law classifies VASPs as 'obliged entities,' subjecting them to AML/CFT requirements.
IV. Compliance Requirements
- Mandatory VASP Registration: All cryptocurrency exchanges and wallet providers must register with the NBG to operate legally.
- AML/CFT Compliance: Registered VASPs must adhere to the Law on Facilitating the Prevention of Money Laundering, fulfilling reporting and customer due diligence obligations.
- Travel Rule: VASPs are required to implement the FATF Travel Rule for virtual asset transfers.
- Corporate Tax for Entities: Legal entities (e.g., LLCs) are subject to a 15% corporate income tax, but only upon the distribution of profits (following an Estonian model).
V. Notable Restrictions or Limitations
- Not Legal Tender: Virtual assets cannot be used as a direct means of payment for goods and services in Georgia. However, VASPs are permitted to facilitate conversions between virtual assets and fiat currency.
- Illegal Unregistered Operation: Operating a cryptocurrency business without NBG registration is illegal and punishable by heavy fines.
VI. Recent Developments or Notes
- Individual Tax Exemption: Individuals pay 0% tax on cryptocurrency capital gains. This is because the income is treated as 'sourced from virtual space' and is considered non-Georgian sourced income under the territorial tax regime.
- CBDC Exploration: The country Georgia (not the U.S. state) is actively exploring Central Bank Digital Currency (CBDC) pilots for a Digital Lari.
- Jurisdictional Clarification: It is crucial to distinguish the country Georgia from the U.S. state of Georgia, as recent regulatory news (e.g., 'HB 1053' on CBDCs) applies solely to the U.S. state.
Full Analysis Report
Full Analysis Report
Georgia has successfully transitioned from an unregulated crypto-friendly hub to a fully regulated jurisdiction with a clear licensing framework. The regulatory turning point occurred in 2023 with amendments to the 'Organic Law on the National Bank of Georgia' and the subsequent issuance of Order No. 94/04. These measures introduced a mandatory registration regime for Virtual Asset Service Providers (VASPs), placing them under the direct supervision of the National Bank of Georgia (NBG). As of late 2024, there are approximately 27 registered VASPs, including local entities of major global exchanges like Bybit, confirming that the licensing regime is active and functional.
The regulatory framework focuses heavily on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) compliance, aligning Georgia with FATF recommendations. VASPs are required to implement robust KYC procedures, appoint compliance officers, and adhere to the 'Travel Rule' for transaction reporting. Despite these stricter operational requirements, the government has maintained a hands-off approach regarding retail access; there are no restrictions on the types of assets individuals can trade, nor are there limits on investment amounts for retail clients.
From a taxation perspective, Georgia remains one of the most attractive jurisdictions globally for individual investors. The Revenue Service of Georgia has consistently interpreted crypto trading income for individuals as being sourced from 'virtual space' rather than Georgian territory. Under Georgia's territorial tax system, this results in a 0% income tax rate on capital gains for individuals. However, corporate entities do not share this total exemption; they are subject to the standard 15% corporate tax on distributed profits, though they benefit from the deferral of tax until distribution.
While trading and holding are encouraged, the use of cryptocurrency as a direct means of payment is restricted. The law explicitly states that virtual assets are not legal tender, and payments for goods and services using virtual assets are prohibited unless facilitated through a VASP that converts the asset to fiat. This distinction preserves the Georgian Lari's status as the sole legal tender while allowing the crypto economy to flourish in parallel as an investment and trading sector.
Georgia has successfully transitioned from an unregulated crypto-friendly hub to a fully regulated jurisdiction with a clear licensing framework. The regulatory turning point occurred in 2023 with amendments to the 'Organic Law on the National Bank of Georgia' and the subsequent issuance of Order No. 94/04. These measures introduced a mandatory registration regime for Virtual Asset Service Providers (VASPs), placing them under the direct supervision of the National Bank of Georgia (NBG). As of late 2024, there are approximately 27 registered VASPs, including local entities of major global exchanges like Bybit, confirming that the licensing regime is active and functional. The regulatory framework focuses heavily on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) compliance, aligning Georgia with FATF recommendations. VASPs are required to implement robust KYC procedures, appoint compliance officers, and adhere to the 'Travel Rule' for transaction reporting. Despite these stricter operational requirements, the government has maintained a hands-off approach regarding retail access; there are no restrictions on the types of assets individuals can trade, nor are there limits on investment amounts for retail clients. From a taxation perspective, Georgia remains one of the most attractive jurisdictions globally for individual investors. The Revenue Service of Georgia has consistently interpreted crypto trading income for individuals as being sourced from 'virtual space' rather than Georgian territory. Under Georgia's territorial tax system, this results in a 0% income tax rate on capital gains for individuals. However, corporate entities do not share this total exemption; they are subject to the standard 15% corporate tax on distributed profits, though they benefit from the deferral of tax until distribution. While trading and holding are encouraged, the use of cryptocurrency as a direct means of payment is restricted. The law explicitly states that virtual assets are not legal tender, and payments for goods and services using virtual assets are prohibited unless facilitated through a VASP that converts the asset to fiat. This distinction preserves the Georgian Lari's status as the sole legal tender while allowing the crypto economy to flourish in parallel as an investment and trading sector.
Source Evidence
Primary and secondary sources cited in this analysis
"Any person who is not registered as a Virtual Asset Service Provider by the NBG... is strictly prohibited to provide virtual asset services."
"Payments with virtual assets are prohibited, except for cases determined by a legal act of the National Bank of Georgia."
"Income received by a natural person from the supply of crypto-assets is not considered as income received from a source in Georgia."
"Since August 1, 2023, Georgia has required VASPs to register with the National Bank of Georgia (NBG) under Order No. 94/04."
"27 virtual assets service providers (VASPs) are currently supervised by the National Bank of Georgia (NBG)."
Web Sources (8)
Sources discovered via web search grounding
Search queries used (5)
- Georgia organic law on national bank virtual asset service provider
- Georgia crypto tax individual 2024
- Georgia crypto payments ban
- National Bank of Georgia cryptocurrency regulation VASP registration 2024 2025
- list of registered VASPs National Bank of Georgia
https://www.lightspark.com/knowledge/is-crypto-legal-in-georgia
https://rue.ee/crypto-regulations/georgia/
https://www.ainvest.com/news/bitcoin-news-today-georgia-aims-2025-crypto-hub-0-tax-incentives-14-13-adoption-rate-2507/
https://manimama.eu/cryptocurrency-compliance-georgias-approach-to-vasp-regulation/
https://nbg.gov.ge/en/faq/125
https://1tv.ge/lang/en/news/nbg-urges-georgian-citizens-not-to-engage-in-virtual-asset-services-with-unregistered-entities/
https://www.gbc.ge/en/news/finanse/vasps-to-come-under-full-nbg-supervision-in-georgia
https://www.nur-legal.com/news/%F0%9F%87%AC%F0%9F%87%AA-georgia%E2%80%99s-crypto-licensing%3A-a-clear-path-for-vasps-in-2025