Digital Wallet Regulations involve a complex legal framework governing the issuance, circulation, and redemption of electronic money (E-money) in Georgia. Digital wallets, as an alternative to cash and bank cards, are becoming increasingly popular, but their functioning is subject to strict supervision by the National Bank of Georgia (NBG). Companies operating in this field are obliged to observe limits for unverified wallets, ensure the safety of customer funds, and adhere to anti-money laundering rules. Legal.ge offers access to experts in banking and technology law who will help you legally set up and manage a digital wallet business.
What does the Digital Wallet Regulations service cover?
Specialists registered on the Legal.ge platform offer comprehensive legal services for electronic wallet providers:
- Licensing Requirements: Consulting on registration as an electronic money provider and preparing the license application.
- Issuance and Redemption of E-money: Drafting the legal scheme for issuing electronic money and outlining rules for redemption by the user at par value in accordance with legislation.
- Limit Management: Legal monitoring of the systemic implementation of transaction and balance limits established for identified and unidentified wallets.
- Customer Identification (KYC): Developing remote verification procedures that meet NBG standards.
- Safeguarding Funds: Creating legal mechanisms for segregating customer funds from the company's own funds.
- Terms and Conditions (T&C): Detailed drafting of usage rules for the digital wallet, including fees, security rules, and party liability.
Common scenarios and needs
Businesses creating or using digital wallets often face the following issues:
- Unverified users: How to allow users to open a wallet easily without violating the law regarding anonymous accounts.
- Cryptocurrency integration: Connecting a digital wallet to virtual assets and legally separating this process from traditional electronic money.
- Cross-border transfers: Regulating fund transfers from a digital wallet abroad and complying with currency control rules.
- Account seizures: Managing procedures for freezing user electronic wallets upon the request of tax authorities or courts.
Georgian Legal Framework
Digital wallet regulation primarily relies on the following acts:
- Law of Georgia on Payment Systems and Payment Services: This is the "bible" for electronic money providers, defining what electronic money is and how it is issued.
- Orders of the President of the National Bank of Georgia: Regulate reporting forms, cybersecurity standards, and provider capital requirements.
- Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism: Sets strict requirements regarding client identification.
Service Process Step-by-Step
Collaboration with a specialist on Legal.ge includes:
- Business Model Audit: Determining what type of wallet you are creating (closed, semi-closed, or open system) and which regulations apply to it.
- Structuring: Legally arranging the cash flow scheme (where funds come from, where they are stored, how they leave).
- Documentation Creation: Preparing user agreements, internal policies, and contracts with partner banks.
- Registration Support: Managing the registration process at the National Bank if required.
Why Legal.ge?
The digital wallet business is technologically complex, and legally even more intricate. A mistake in setting limits or safeguarding user funds can lead to severe fines. Legal.ge allows you to work with professionals who know the National Bank's requirements by heart and will help you create a stable, legal, and successful FinTech product. Find your lawyer on Legal.ge.
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