Legislative Framework
On March 6, 2026, the Governor of the National Bank of Georgia signed Order No. 52/04 On the Approval of the Rules for the Initial Coin Offering of a Stablecoin by a Virtual Asset Service Provider, which complements previous government initiatives to legalize cryptocurrency, pegging stablecoins to local or foreign currency and establishing clear requirements for companies that would like to issue them.
The order is partially inspired by the Genius Act (USA), MiCA (EU), and VARA (Dubai), though in many respects, Georgia’s requirements for issuers are less stringent, lower market entry barriers for small fintech companies, and make the country more attractive as a potential regional crypto hub.
Which stablecoins the law targets
The National Bank of Georgia’s definition of a stable virtual asset specifies that its value may be pegged to the fiat lari, a foreign currency, or even another type of asset upon the condition that the issuer is able to provide 100 percent backing for the tokens at any given moment.
From this, it follows that the law primarily targets the most popular and reliable type of stablecoin, that which is fiat-backed, popular examples of which are dollar analogs USDT and USDC. A broader interpretation of the document, however, allows for more exotic variants, such as those that are commodity-backed, crypto-backed, or even mixes of different fiat and/or cryptocurrencies. Only algorithmic stablecoins are excluded from the scope of this discussion.
In the appendix to the order, the regulator establishes basic requirements for asset reserves:
- They must be denominated exclusively in the currency to which the stablecoins are pegged, with fiat pegged to the lari, dollar, euro, or other foreign currency.
- No less than 10% of the reserves must consist of cash or time deposits (with a term of up to 3 months) in licensed commercial banks in Georgia.
- It is recommended that the remaining reserves be held in government (treasury) bonds of up to 6 months (or 1 year for Georgian debt securities). Bonds can be either classical (coupon) or discount (zero-coupon).
- Other reserve assets must be approved by the National Bank, though they are theoretically possible, even for fiat-backed. For instance, following global practice, Tether Limited, which manages USDT, has at least 9% backed by precious metals and nearly the same amount by securitized bonds.
- Additional approval is even more important for other types of stablecoin. The regulator may well require that the reserves consist of physical metal or unallocated metal accounts for gold-pegged tokens, for example.
A stablecoin issuer may use income from reserve assets within the scope of its activities, provided that this does not decrease the required (100%) volume of backing. At the same time, any investment schemes for distributing income from reserves in favor of virtual asset holders are prohibited.
According to the law, stablecoin owners must be able to exchange their coins at face value for the underlying asset at any time. Issuers are given 3 business days (or 5 days if the amount exceeds GEL 300,000) to execute the contract.
Who has the right to issue stablecoins
The simple answer is: companies with a Virtual Asset Service Provider (VASP) license. The National Bank introduced this category of legal entities back in 2023, granting them the right to work with crypto. We wrote about obtaining a VASP license (and GeCrypto) in a separate article.
A crypto license is not the only condition:
- To issue stablecoins, a VASP must possess capital of at least GEL 500,000 (approximately USD 186,000 or EUR 158,000) legally and operationally separated from the reserves to protect cryptocurrency owners should the organization go bankrupt.
- Issuers are obliged to comply with a two-tier capital structure consisting of primary (Tier 1) and secondary (Tier 2) elements.
- Primary capital, which includes share capital, retained earnings, convertible debt, and other reserves, must account for at least 75% of the total volume. These funds must be available for unconditional coverage of losses at the moment they arise.
- Secondary capital cannot exceed 1/3 of the primary capital. This category mainly includes subordinated debt with a maturity of at least 5 years.
- Should the capitalization of a stablecoin exceed GEL 1 million (or the equivalent in another currency), the issuer will need additional capital of at least 2% of the average daily value of reserves over the last 6 months (but not more than GEL 50 million).
- Should the capitalization of a digital asset exceed GEL 15 million, the National Bank will introduce stricter requirements for the corporate governance of the VASP, requiring it to form a supervisory board, create an audit committee, and distribute responsibility within its organizational structure in a specific manner, among other things.
How the stablecoin issuing process works
Even fintech startups satisfying the requirements must first coordinate with the National Bank of Georgia before being allowed to organize an initial coin offering (ICO) and launch advertising for the asset by:
- Drafting a White Paper with information about the company, the characteristics of the asset, technological architecture, and risks. The document must be published on the official website for public access.
- Completing an operational risk assessment form according to the Basel Committee methodology.
- Developing cybersecurity and risk management policies and obtain an independent audit opinion on the systems’ compliance with national criteria.
- Choosing a commercial bank where the reserves will be stored (requires separate approval).
- Providing the regulator with a package of documents and other sensitive information.
The National Bank is introducing a 6-month transition period for Georgian companies that issued stablecoins before the new regulation came into force, such as Cryptal with its TOL cryptocurrency pegged to the lari, dollar, and euro (TOGEL, TOUSD, and TOEUR), during which they must undergo the asset legalization procedure (ends in September 2026).
Obligations under the law
Companies issuing stablecoin must continue to report on their activities to the regulator to avoid fines, suspension of issuance, or a revocation of the VASP license by:
- Submitting annual financial statements to the National Bank by July 15 of the year following the reporting year.
- Conducting penetration testing and business continuity planning (BCP) at least once a year.
- Conducting Vulnerability Scanning at least twice a year.
- Assessing the composition of reserves daily, updating the information on the website, and verifying reserves with external auditors every quarter. If reserves exceed GEL 15 million, the auditing must be conducted by companies from an approved list that includes Deloitte, PwC, KPMG, Grant Thornton, Moore Global, and 15 other organizations.
- Strictly performing AML/KYC procedures, conducting enhanced due diligence (EDD) for non-clients, and maintaining compliance reporting in accordance with anti-money laundering laws.
- Retaining accounting records for at least 10 years, and versions of the White Paper and risk management systems for at least 8 years after the stablecoin is withdrawn from circulation.
- Notifying the regulator of changes to the charter and the holding of general shareholders’ meetings within 10 days of the event.
What makes stablecoins attractive
Stablecoins are currently the fastest-growing part of the cryptocurrency market. The consulting firm McKinsey notes that the capitalization of tokens at the beginning of 2026 was USD 300 billion: Just five years ago it was USD 20 billion.
By the end of the decade, the amount is predicted to increase to USD 3 trillion, partly because transactions in stablecoins will replace inefficient, slow, and expensive operations within the traditional banking system. Operations employing stable virtual assets grew by an astronomical 733% over the past year in the B2B sector alone.
Neural networks (and their related economy) are expected to drive the market. Citrini Research recently published a sensational forecast predicting AI agents would become ubiquitous by 2028 and use stablecoins to bypass global banks and payment systems and conduct their own monetary transactions.
In Georgia, cryptocurrency companies can find a relatively simple way to legalize and carve out a place in a growing market, with a variety of startup support programs (such as exemption from VAT, corporate tax, and dividend tax for participants of Free Industrial Zones) making the country even more attractive.
To date, 35 companies have already received a VASP license in Georgia. One is the large international crypto exchange Bybit, which has stated it is investing in Georgia precisely because of the high level of cryptocurrency penetration in the country and its forward-looking integration of stablecoins into the regulatory framework.
PB Services can help you register a company in Georgia and obtain a VASP license, handle reporting, and ensure your cryptocurrency business does everything above board. Drop us a line to sign upfor a free consultation.