Cryptocurrency is here. According to Triple-A, there were already 560+ million digital asset owners worldwide in 2024, a number that is predicted to hit 861 million, or almost 11% of the world’s population, in the near future.
Not to be outdone, Georgia is welcoming more and more global offices, attracted in part by 0% tax oncryptocurrency transactions and a low cost of electricity convenient for mining. Add to that favorable legislation motivating business and ordinary citizen alike to embrace the future and you get the perfect cryptocurrency storm. To really benefit from digital assets, though, you’ll need a crypto account.
Types of crypto accounts
“Crypto account” is a blanket term for different methods (or places) you can use to store crypto assets. It has a unique ID number, but that’s where the similarity to a bank account ends.
The specialized exchanges and digital wallets used to store cryptocurrency are categorized as a VASP, or Virtual Asset Service Provider, an official term the National Bank of Georgia adopted in 2023, following international practice.
Just in case you were wondering: Cryptocurrency is an alternative to fiat money, or dollars, euros, Georgian lari, etc… The main difference is that fiat is issued and controlled by governments, while cryptocurrency exists in digital form and is not (currently) tied to any country or central bank. Crypto can easily be exchanged for fiat almost anywhere in the world.
What types of crypto accounts are there?
Different methods of storing cryptocurrency vary in terms of security, convenience, and degree of control over your assets. In this article, we will look at the big three: crypto exchanges, online wallets, and offline wallets.
Crypto exchanges – the most popular method
According to CoinGecko, there are over 200 crypto exchanges in the world, any of which you can register with, barring restrictions on certain passports. In an exchange, your funds are held in their account, not yours.
Some popular platforms:
- Binance is the world’s largest crypto exchange, with turnover of over USD 22 billion daily. Open to users from over 100 countries, including Georgia.
- ByBit is the second largest platform in terms of turnover and one of the few that has obtained a VASP license to operate officially in Georgia. While a crypto license may not be the deciding factor, it does serve as a kind of guarantee of transparency: VASP status means that ByBit complies with the Georgian National Bank’s anti-money laundering (AML) and customer identification (KYC) requirements.
- Cryptal might not be as big a player as the aforementioned two, but it is headquartered in Tbilisi and it also has a VASP license. Interestingly, it was one of the first platforms in the world to work with the lari and even issued the TOL stablecoin, pegged at 1:1 to the Georgian national currency, making it very convenient to work with from Georgia.
The main advantage here is the ready-made ecosystem, the “out-of-the-box solution,” if you will. Just register on the website or in the mobile app, and you’re good to store, buy, and sell different types of cryptocurrencies or exchange them through a verified intermediary. You can also use an exchange to speculate on the prices of digital coins, bet on the rise or fall of assets through options, and trade with leverage, just like on the stock market, though not without a clear understanding of the risks involved.
The disadvantages of cryptocurrency exchanges include:
- Mandatory account verification (involving the transfer of your personal data) — to discussed in more detail later.
- Trading and withdrawal fees.
- The risk of data leaks and asset loss. Despite security measures, no crypto exchanges are immune to hacking and fraud. In 2022, FTX, the third-largest exchange at the time, filed for bankruptcy when it was discovered that USD 8 billion in customer assets had been stolen by platform management.
Online wallets — yes, but…
Mobile apps, browser extensions, or software for your home computer or laptop also known as a hot wallet. You’ll definitely want to go with a custodial wallet. The important difference between a custodial wallet and an exchange is the private key to access assets is stored on the user’s device rather than the cloud.
The most popular cryptocurrency wallets are MetaMask, Trust Wallet (the official wallet from Binance), and Exodus, but there are others, which differ in the cryptocurrencies they support and their interface, among others.
Although a good way to ease into the crypto world, make transfers between accounts, and store small amounts of cryptocurrency for longer periods of time, a wallet probably won’t be enough to exchange digital assets for fiat money, for which you will need an intermediary like an exchange.
Some of the disadvantages of online wallets include:
- Vulnerability to hacking (and not just the exchanges, but your smartphone or computer). An online wallet is always connected to the internet, which means it is theoretically accessible to hackers, phishing attacks, viruses, malware…
- Data leakage. Information about your device, IP address, activity, and even your balance can be at least partially collected and stored by third-party services (especially if the wallet is custodial).
- (Not) storing large amounts for a long time. Hot wallets are great for everyday transactions, but their inherent vulnerability should rule them out for major assets (if losing it would hurt too much, it’s too much for a hot wallet).
Offline wallets — maximum protection
Also known as cold wallets, offline wallets are non-custodial by default and usually implemented as hardware connected to a computer. Not being online, they minimize the risk of hacking (but not theft).
Popular online wallets include Ledger Nano X, which synchronizes with your phone or computer via Bluetooth, Trezor Model T with a touch screen and advanced security system, budget SafePal S1 with QR code transactions, Keystone Pro, and CoolWallet Pro, among others.
Offline wallets are good for large amounts and long terms. They are also inconvenient for frequent transactions, require investment in the device itself (starting from USD 50), and it you lose your offline wallet, you lose your cryptocurrency. Perhaps you’ve caught some of the media coverage of Welsh computer engineer James Howells, whose girlfriend accidentally threw away a hard drive containing 7,500 bitcoins, now worth about USD 820 million. Howells has been pleading with Welsh authorities for several years for permission to search a local landfill for the hard drive.
How to open a cryptocurrency account
How you open a crypto account depends on how you plan to store your assets, but in any case it is no different for residents of Georgia than elsewhere:
- On a cryptocurrency exchange, you use your email address or phone number to access basic functionality. For more options, you’ll need to verify identity with your passport and in some cases even fill out a questionnaire and confirm your address of residence, much like opening an account at a regular bank.
- For a cryptocurrency wallet, you install the application (or connect your device to a computer for an offline wallet) and follow the instructions to configure the security settings without having to transfer any data. With access to the interface – following right after – you can replenish your account, transfer assets, and use other wallet features.
Exchanging cold, hard cash for cryptocurrency
All the methods listed in this section work both ways: fiat to crypto to fund your digital account, and crypto to fiat to withdraw.
1. Peer-to-peer (P2P) means you transfer real currency (any currency) from your bank card or PayPal account to a stranger, who then transfers a specific, pre-selected cryptocurrency to your crypto account. Intermediaries for your bank card and fiat are easy to find through exchange services like Binance P2P, Bybit P2P, or third-party sites like bestchange.com
Important: P2P platforms offer good rates, but banks may not like frequent or large transfers to other people and block your account or request documents from the financial monitoring service. Use with caution.
2. The alternative to P2P is offline exchangers, i.e., small kiosks or offices you bring cash to in return for digital assets. Commission is low, and there are many exchangers in Tbilisi, Batumi, and Kutaisi. Find the nearest on an aggregator site like cryptonvg.com.
3. Cryptomats are also widespread in major cities and work like fully-automated offline exchangers. To buy cryptocurrency, insert cash into the crypto-machine and enter the number of the crypto-account and type of token to be deposited. To sell crypto, enter the crypto account, and the machine will dispense cash on the spot.
Sometimes cryptomat providers have a mobile application you need to install. The downside to this method is that cryptomats can be like exchanging money in the airport – bad rates, serious losses.
4. Don’t want to leave the house but worried to have your bank card blocked after a P2P transaction? Check out fintech services like Mercuryo, Simplex, or MoonPay, sometimes built into cryptocurrency wallets or exchanges for convenience. Buy cryptocurrency with a bank card without bringing other individuals into the transaction, reducing the risk of your bank noticing. Many of these services also require a passport, though, and fees can be high.
Edit the contenHowever you choose to buy cryptocurrency, a bank will come in handy. For help opening an account in Georgia (remotely, if you want), contact PB Services. We will prepare your supporting documents on the origin of funds, help you fill out the application form, and point you towards the best bank for your needs. A 30-minute consultation is completely free, no strings attached.t of the Infobox.
Why you need a crypto account and why crypto is convenient
Long gone are the days when crypto was pure investment. It is a valuable tool for freelancers, entrepreneurs, IT specialists, and companies working internationally. A crypto wallet or account on an exchange is convenient way to receive, store, and use any digital assets, especially if you earn or transfer money from abroad.
From cryptocurrency you get:
- Cheap, fast currency exchange with USDT stablecoins, pegged to the dollar at 1:1 and convenient for expats and freelancers who live in Georgia but earn in dollars or euros
- An instant, almost commission-free alternative to SWIFT that is very cheap because the banks are kept out of it
- Asset diversification, spreading risks and reducing dependence on traditional currencies and banks
- Financial flexibility as interest in digital money and blockchain technologies grow worldwide. You might recall how Donal Trump promised to turn the US into the world’s crypto capital and even formed a strategic crypto reserve (similar to the gold and foreign currency reserve)
What businesses need to work with cryptocurrency in Georgia
If you are a legal entity and want to use cryptocurrency in business (to pay contractors, keep assets on the balance sheet, or accept payment in crypto), just register on a reliable crypto exchange or use a verified wallet, and you’re good to go.
Let the PB Services team and their outsourced accounting services help you navigate the intricacies of accounting and legal support for cryptocurrency transactions.
If your company plans to provide professional services related to cryptocurrencies, be it exchange, storage, issuance of tokens, conversion to fiat, or management of client assets, you will need VASP (Virtual Asset Service Provider) status, i.e. a crypto license.
To obtain it, you’ll need to register a company in Georgia, open a bank account for the business, and provide authorities with an impressive package of documents consisting of a detailed business plan, an anti-money laundering policy, information security documentation, and much more (check out the whole procedure in more detail in this article).
Collecting all the documents can be a challenge, but never fear, PB Services can help you obtain a crypto license in Georgia. We guarantee confidentiality, support at every stage of the application process, and assistance with reporting after you’ve received your coveted VASP status.