The National Bank of Georgia (NBG) has announced plans to launch mandatory supervision of virtual asset service providers (VASP) starting September 1, 2023.

The NBG’s acting governor Archil Mestvirishvili said that the new regulatory measures will help the country combat money laundering and comply with Western sanctions against Russia and Belarus.

“We have created an additional department for monitoring sanctions,” Mestvirishvili said. “The enforcement of the sanctions is very important and the financial sector takes it very seriously.”

In addition to the VASP supervision, the NBG is also preparing to enforce a set of major restrictions for foreign bank account holders. Starting from September 1, Russian citizens will not be allowed to withdraw more than 20% from their savings accounts immediately.

According to the central bank, such measures aim to support Georgia’s economic stability amid the increasing foreign currency deposits by Russians.

The news comes amid the Georgian government preparing to approve cryptocurrency-related legislation in the autumn session.

As previously reported, a local draft bill on crypto regulation aims to coordinate local laws with major European Union directives and provide legal status to entities involved in digital asset trading.

The NBG’s announcement is a sign that Georgia is taking the issue of cryptocurrency regulation seriously. The new regulatory measures will help to ensure that cryptocurrency firms operating in Georgia are complying with AML regulations and are not being used to launder money.

The new restrictions on foreign bank account holders are also a sign that Georgia is taking steps to protect its economy from the impact of Western sanctions against Russia.