Self-Service Kiosks (Crypto ATMs) in the Georgian Regulatory System
A self-service kiosk — colloquially a crypto ATM — is a machine through which a customer converts cash into a convertible virtual asset or, conversely, converts a convertible virtual asset into national or foreign currency. The Organic Law of Georgia on the National Bank of Georgia names this device literally: Article 2 defines "virtual asset service" as including, among other types, "the exchange of convertible virtual assets (including through a self-service kiosk) into national or foreign currency, into another virtual asset or into a financial instrument". Operating such a machine is therefore not an unregulated technical matter — it falls squarely within a statutory category.
A virtual asset, under the same article, is a digital expression of value that is interchangeable, is not unique, can be transferred or traded digitally, and is used for investment and/or payment purposes; it does not cover digital expressions of funds, securities or other financial instruments. A convertible virtual asset is one with an equivalent market value in national or foreign currency, another virtual asset or a financial instrument. A virtual asset service provider is a person that renders such services for the benefit of another person: when a third party uses the machine and the operator runs the exchange for that party's benefit, the operator becomes a virtual asset service provider and its activity enters the regime described below.
An Exchange Machine, Not a Payment Terminal
Article 39-1 of the law sets two premises: a virtual asset is not legal tender, and payments in virtual assets are prohibited, except in those cases determined by a legal act of the National Bank of Georgia that are necessary for carrying out virtual asset services. The function of a self-service kiosk is therefore legally unambiguous: the machine is an exchange instrument, not a payment terminal. An operator may not configure scenarios that would in substance amount to accepting payment in a virtual asset outside the framework defined by the National Bank's legal act for the provision of the service. This boundary must be built into the business model from the outset, because crossing it becomes a ground for supervisory measures and sanctions.
Registration with the National Bank — the Obligation and Its Procedural Layer
Article 52-5 governs virtual asset service providers. Under its second paragraph, a provider is obliged to register with the National Bank of Georgia and to satisfy the requirements established by the National Bank. The same norm provides that the rules for the registration, deregistration and regulation of providers in the National Bank are established by a normative act of the National Bank — meaning the application form, the list of supporting documents and other procedural details are set out in those acts, and the dossier must be prepared against their current versions.
The third paragraph is stricter still: it is impermissible for virtual asset services to be carried out by a person that is not a virtual asset service provider registered with the National Bank, or a representative of the financial sector empowered by the legislation regulating its activity to carry out virtual asset services. In practice this means that launching a kiosk network before registration is a violation of law — regardless of the stage the business has reached or the number of machines deployed.
The Pure-Entity Rule and Group Structuring
The fourth paragraph of Article 52-5 establishes what is known as the pure-entity rule: a virtual asset service provider is prohibited from engaging in any activity other than the provision of virtual asset services, the auxiliary activity necessary for providing them, and the exchange of its own virtual assets. This norm matters especially for groups that run businesses alongside a kiosk network: the service requires a separate, specialised legal entity whose activity is confined to exactly these three elements. A poorly built structure can become an obstacle at the registration stage itself, so group design should begin and end with this requirement of the article.
Supervisory Instruments and Requirements of the National Bank
The first paragraph of Article 52-5 arms the National Bank with broad powers. Supervision encompasses the registration and deregistration of providers, inspection and regulation, the issuance of written instructions, and the imposition of additional requirements, restrictions and sanctions. For a kiosk operator this catalogue translates into several practical obligations:
- providing information on the sources of the origin of its capital, and on the direct and beneficial owners of its significant share, upon request;
- meeting the suitability criteria for administrators, which are determined by a legal act of the National Bank;
- readiness for on-site and/or remote inspection, and for the audit of accounting documents, reporting components and other materials;
- implementing standards for the storage of virtual assets and for risk management, including operational and cyber-security risks;
- complying with the rules on accompanying information upon the transfer of a virtual asset, as determined by a legal act of the National Bank;
- complying with the minimum amount of supervisory capital and its calculation rule, and with requirements deriving from the category of service rendered.
In case of violation, the National Bank may impose a sanction on the provider and its administrator, including a monetary fine, the amount of which is directed to the state budget of Georgia; it may also suspend or restrict certain types of activity or operations, including by types of virtual asset. To this is added the anti-money-laundering layer: separate legislation designates virtual asset service providers as accountable persons and imposes requirements for customer identification, monitoring and internal control, so deploying identification on the machine and monitoring transactions is an integral part of the business plan.
Frequently Asked Questions
Must an operator register if the kiosk exchanges in one direction only?
Yes. Article 2 names the self-service kiosk within the exchange limb of the definition of "virtual asset service", so even a one-way exchange falls fully under the regime of Article 52-5: registration with the National Bank is an obligation, and providing services unregistered is impermissible.
Can the kiosk accept payments?
No. Under Article 39-1, a virtual asset is not legal tender and payments in virtual assets are prohibited, except for the cases determined by a legal act of the National Bank that are necessary for providing the service. The machine's function is exchange, not payment.
Who determines the registration procedure and the specific requirements?
Article 52-5 establishes the obligation itself, while the rules of registration, deregistration and regulation — as well as the matters of capital, administrator suitability, storage, risk management and accompanying information — are determined by normative and legal acts of the National Bank. The dossier must always be prepared against the current versions of those acts.
What happens if the provider also runs another business?
Under the fourth paragraph of Article 52-5, a provider is prohibited from engaging in any activity other than the provision of virtual asset services, the auxiliary activity necessary for it, and the exchange of its own virtual assets. The kiosk business must therefore be separated into a dedicated, specialised legal entity.
How We Help on Legal.ge
The Legal.ge team accompanies operators of self-service kiosks (crypto ATMs) along the entire route: we structure the group in line with the pure-entity rule, prepare the National Bank registration dossier, design identification and monitoring processes for the machine, and build out the accompanying-information layer. Contact us — we will assess your project and deliver a concrete plan for your kiosk network.