29 Jul
29Jul

Georgia is rapidly solidifying its position as a leading Bitcoin-friendly country and a significant player in the global crypto landscape. Ranked among the top 10 nations for its favorable tax regime and boasting the second-highest Bitcoin mining hashrate, the country's low electricity costs are attracting a growing number of crypto startups and investors.


Crypto Regulations and Government Stance

While cryptocurrency is not considered legal tender, Georgia permits owning and trading crypto for exchange and investment purposes. The National Bank of Georgia (NBG) has been proactive in developing the crypto ecosystem through regulated laws.

A key regulation is the Virtual Asset Service Provider (VASP) registration law, introduced by the NBG in 2023, aimed at ensuring secure transfer and safekeeping of virtual assets. By 2025, Georgia is emphasizing the integration of digital assets into anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations, with full implementation of the new VASP framework expected by 2026.

The Georgian government, primarily through the NBG and the Financial Monitoring Service (FMS), prioritizes:

  • AML/CFT: Robust frameworks to maintain financial system integrity.
  • Transparency and Safekeeping: Requiring digital platforms to report suspicious activities and verify users to prevent fraud, while collecting transaction data to enhance transparency.
  • Crypto Asset Integration: Actively considering applications for potential digital assets to integrate them into the broader economy.

Crypto Licensing and Taxation

Georgia offers various crypto licenses regulated by the NBG, tailored to different services:

  • Exchange License: Required for platforms like UEEx, Cryptal, Binance, and GeCrypto to exchange cryptocurrencies with fiat, necessitating KYC/AML compliance.
  • Asset Storage License: For companies holding virtual assets.
  • ICO/STO License: Needed for conducting initial coin or token offerings to raise funds, requiring a detailed project description.

Georgia's tax regime is a significant draw for individual crypto investors:

  • No Capital Gains Tax: Individuals face no capital tax on crypto-related activities.
  • Income Tax Exemption: Profits from crypto trading and sales are exempt from income tax for Georgian tax residents, as this income is considered foreign-sourced.
  • VAT Exemption: No VAT applies to crypto exchanges. These tax benefits are contingent on qualifying as a Georgian tax resident, which typically involves spending at least 183 days in the country within a 12-month period or qualifying via a high net worth individual program.

For companies and businesses involved in cryptocurrency, a 15% corporate income tax applies (taxable only upon profit distribution, with an additional 5%). Crypto mining falls under this same tax regime. Georgia also offers a small business status (SBS) with a favorable 1% turnover tax, provided the annual turnover does not exceed 500,000 GEL.


Crypto Adoption and Government Holdings

In 2025, Georgia's cryptocurrency user penetration rate is projected at 14.13%, representing 153,350 users. The digital asset market is estimated to generate US$1.9 million in revenue this year, with an average revenue per user of US$12.1. The country is seeing growing interest, propelled by its individual tax-free regimes.

The Georgian government itself is actively holding Bitcoin, with over 66 BTC as of 2025, valued at approximately $6.86 million, placing it eighth globally in terms of government Bitcoin holdings. While there's no public disclosure on other cryptocurrency holdings, the focus remains on developing a robust crypto framework.


Conclusion

Georgia's proactive and crypto-friendly approach, characterized by clear regulations and attractive tax incentives for individuals, is firmly establishing it as a crypto hub in 2025. The government's strategy aims to draw foreign investment and foster private sector engagement within a well-regulated environment, promising further evolution in its digital asset market.

July 2025, Cryptoniteuae

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