“The authority and functions of the National Bank of Georgia are clearly defined by the Organic Law of Georgia. The National Bank supervises banking and non-bank financial institutions, as well as virtual asset service providers, and these activities may only be carried out by entities that are registered with or licensed by the National Bank of Georgia,” Nino Jeladze, Vice President of the National Bank of Georgia, said regarding the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioning a virtual asset service provider.

According to Jeladze, any entity operating without the required registration or license is conducting business illegally and therefore falls outside the National Bank’s regulatory and supervisory framework.

“I would like to emphasize that the entity sanctioned by the U.S. Treasury Department, as well as companies previously sanctioned by the United Kingdom and the European Union, have never been registered with the National Bank of Georgia. The fact that several sanctioned companies avoided applying for registration demonstrates the strictness of the NBG’s regulatory framework and market entry requirements.

The registration process includes detailed scrutiny of a company’s business model, beneficial owners, the origin of funds, transaction monitoring systems, and other regulatory requirements. This framework serves as an important preventive mechanism and an effective filter against entities that may be linked to illegal activities,” she said.

Jeladze noted that regulatory obligations do not end with registration. All virtual asset service providers supervised by the National Bank are required to comply fully with financial sanctions imposed by the United States, the United Kingdom, and the European Union.

She also stressed that financial institutions are prohibited from establishing business relationships with virtual asset service providers or other financial institutions that are not licensed by the National Bank of Georgia or by the relevant authority in a foreign jurisdiction.

“Georgia was one of the first countries in the region to establish a legal framework for the regulation and registration of virtual asset service providers. The framework has significantly improved transparency, reliability, and accountability in the sector while providing market participants with a clear and predictable legal environment,” She added,

Jeladze said that the National Bank’s regulatory framework is fully based on the standards of the Financial Action Task Force (FATF) and international best practices. She noted that this approach was recognized internationally, including in the 2024 evaluation report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL).