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25.08.2026

Can a Crypto Payment Gateway Legally Settle Merchants in Fiat in Georgia?

Short answer: yes, but not by a single company. Georgian law prohibits the use of virtual assets as a means of payment, and it separately prohibits a registered virtual asset service provider from carrying out any activity other than virtual asset services. A merchant crypto-acceptance model is nonetheless lawful, because the National Bank of Georgia has expressly permitted a registered VASP to hand the fiat proceeds of a crypto-to-fiat exchange to a licensed acquirer or payment service provider inside the same service scheme. The gateway performs the exchange. A regulated payment institution performs the settlement. The two roles cannot sit in the same legal entity.

This article sets out why that is so, which provisions govern each leg of the transaction, and what the National Bank actually examines when it reviews an application built on this model.

Why the question arises at all

Article 39¹ of the Organic Law of Georgia on the National Bank of Georgia, inserted by Law No. 1790-IXმს-Xმპ of 9 September 2022 and in force since 1 January 2023, states two things. First, a virtual asset is not legal tender. Second, making payments with virtual assets is prohibited, except in those cases defined by a legal act of the National Bank which are necessary for the provision of virtual asset services.

Read on its own, that second sentence appears to close the door on any business whose product is "let your customers pay you in crypto." Most foreign operators stop reading there and remove Georgia from their shortlist. The prohibition is real, but it is drafted with a carve-out, and the carve-out is where the merchant model lives.

There is also a drafting signal worth noticing. The statutory definition of a virtual asset in Article 2(ჰ11) of the same Organic Law describes a digital representation of value which is fungible, transferable or tradable in digital form, and used for the purposes of investment and/or making payments. The legislature did not pretend that virtual assets have no payment function. It regulated who may intermediate that function.

What counts as a virtual asset service in Georgia

Article 2(ჰ13) of the Organic Law lists the regulated services exhaustively. They are: 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; the transfer of convertible virtual assets; the storage or administration of convertible virtual assets or of the instruments needed to use them, where this confers control over the asset; the management of a portfolio of convertible virtual assets other than collective portfolio management; the administration of a trading platform for convertible virtual assets; the lending of such assets; and initial offerings and services connected to them.

For a payment gateway, two of these bite immediately. Accepting a customer's crypto into a wallet the platform controls is storage/administration. Converting that crypto into lari, dollars or euro is exchange. Moving it between wallets is transfer. A gateway therefore requires VASP registration with the National Bank before it does anything at all, and under Article 52⁵(3) of the Organic Law, performing a virtual asset service without registration is prohibited outright.

Where the fiat leg becomes a regulated payment service

The moment the converted fiat has to reach the merchant, a second regulatory regime engages, and it is not the virtual assets regime.

The Law of Georgia on Payment Systems and Payment Services (No. 6304-Iს of 25 May 2012) defines acquiring in Article 2(ჰ7) as a payment service which a payment service provider furnishes on the basis of a contract concluded with the recipient, and which comprises the acceptance and processing of a payment operation as a result of which funds are transferred to the recipient. Contract with the merchant, acceptance and processing, funds reaching the merchant. That is a description of what every crypto payment gateway does on its fiat leg, written a decade before the first one existed.

Acquiring is a payment service under Article 13(1)(დ), and Article 15(1) prohibits the provision of payment services by anyone who is not a registered payment service provider, a commercial bank, a microbank, or a microfinance organisation.

Two exemptions are worth testing, and both fail for a typical gateway. Article 13(2)(ბ) excludes payment operations carried out between a payer and a recipient through a commercial intermediary, but Article 2(ჰ31) defines a commercial intermediary as a person authorised to act only on behalf of the payer, or only on behalf of the recipient, in the sale or purchase of goods or services. A platform that onboards both consumers and merchants and stands between them does not fit. Article 13(2)(ვ) excludes technical, telecommunications, digital and IT service providers that support payment services, but only where the funds being transferred do not come into the possession of that provider. A gateway that holds the fiat between conversion and payout is outside that exemption by definition.

The provision that resolves the problem

The answer is in Article 1(7) of the Regulation on the Registration, Cancellation of Registration and Regulation of Virtual Asset Service Providers with the National Bank of Georgia, approved by Order No. 94/04 of the President of the National Bank of 13 June 2023 (registration code 220010000.18.011.016690), in force since 1 July 2023.

That provision entitles a virtual asset service provider, within the services it renders and on the instruction of its customer, to transfer the funds in national or foreign currency obtained from the exchange of convertible virtual assets, in non-cash form, to the recipient's payment service provider, to an intermediary provider, or to an acquirer, including a sub-acquirer, who is included in the service scheme.

This is the merchant model, described by the regulator in its own words. The chain runs: the customer transfers crypto to the gateway; the gateway performs the exchange, which is a virtual asset service it is registered for; the gateway, on instruction, remits the resulting fiat to a licensed acquirer or payment service provider within the scheme; that regulated institution settles the merchant. The virtual asset never functions as the means of payment between customer and merchant, which is what Article 39¹ prohibits. It is the subject matter of a regulated exchange service, and the payment to the merchant is a fiat payment made by an authorised payment institution.

The regulation reinforces the point elsewhere. Article 2(ი) and 2(კ) import the definitions of acquirer and sub-acquirer from the National Bank's Card Instrument Regulation, approved by Order No. 155/04 of 2 September 2020, the National Bank drafted the VASP rules with a merchant acquiring chain expressly in contemplation.

Why the two roles cannot sit in one company

Applicants routinely ask whether they can simply obtain both authorisations. They cannot, and the obstacle runs in both directions.

Article 52⁵(4) of the Organic Law prohibits a virtual asset service provider from carrying out any activity other than virtual asset services, the ancillary activity necessary to provide them, and the exchange of its own virtual assets. Acquiring is not a virtual asset service and is not ancillary to one, it is a separately regulated financial service with its own registration.

Running the other way, Article 13¹(1) of the Law on Payment Systems and Payment Services restricts a registered payment service provider to payment services plus an enumerated list of adjacent activities: closely related services such as cash collection, currency exchange, confirmation of payment operations, data storage and processing; payment system management; limited lending tied to payment execution; advertising of its own services; financial software development; and a small number of others. Virtual asset services do not appear on that list.

The practical consequences follow directly. A group serving the Georgian market through this model needs either two Georgian entities under common ownership, each separately authorised, or one Georgian VASP contracting with an independent licensed bank, acquirer or payment service provider for the settlement leg. The second route is faster and cheaper, and it is the one most foreign entrants take.

What the National Bank actually examines

The centre of gravity of a VASP application built on this model is not the corporate paperwork. It is the transaction scheme.

Article 3(1)(უ) of Order No. 94/04 requires a schematic description of how each virtual asset service is performed, showing the movement of information, virtual assets and funds from the beginning of the service to its end, naming every participant: the payer or asset transferor, that person's provider, the recipient including the asset recipient, the recipient's provider including the acquirer and sub-acquirer, and any intermediary provider. A separate scheme is required for each service, and for each virtual asset where the schemes differ. Where a foreign VASP or payment service provider sits in the chain, the applicant must list them together with their supervisory authorities.

Two provisions make the settlement partner a gating item rather than a detail. Under Article 3(6), where a payment service provider is connected to the applicant's scheme, the National Bank may require that provider's consent, including conditional consent, before registering the applicant. And under Article 3(9)(გ), the National Bank refuses registration where the submitted scheme shows that the planned activity does not correspond to a virtual asset service as defined in the Organic Law. A scheme in which the applicant itself pays the merchant invites exactly that refusal.

Article 8(1) adds a counterparty filter. A VASP may not establish a business relationship with a virtual asset service provider or financial institution that is unlicensed and unregistered, that is not subject to AML/CFT regulation and supervision, or that is located in a jurisdiction whose legislation does not impose requirements identical to or stricter than Georgian law under the FATF Recommendations.

Eligibility, substance and conduct requirements

A VASP must be a legal entity incorporated and registered under Georgian law, in the form of a limited liability company or a joint stock company (Article 1(5)). Providing virtual asset services through an agent is prohibited (Article 1(9)).

Substance is tested, not assumed. The head office must be located in Georgia and must be the place from which the administrators actually manage the business, and it must be physically separated from premises used by any other person for any purpose (Article 7(1)–(3)). At least one person authorised to represent the company must be physically present in Georgia for no fewer than 14 calendar days in each calendar month (Article 7(12)).

Administrators must satisfy fit-and-proper criteria under Article 3(3), which include a higher education qualification in economics, finance, banking, business administration, audit, accounting, law, information technology, quantitative methods or another relevant field, or at least two years in a managerial position in the financial or virtual asset sector. Criminal record certificates are required from the competent authority of every country in which the person was resident during the preceding ten years; a Georgian certificate must be no more than 15 calendar days old and a foreign certificate no more than 60 (Article 3(1)(კ)). Where the company's sole shareholder is also its director, it must appoint at least two directors (Article 3(5)).

The application must include a business plan with a budget forecast covering at least the next three years, demonstrating that the applicant intends to conduct the activity on the territory of Georgia (Article 3(1)(ღ)), together with the AML/CFT internal control framework and the institutional money laundering and terrorist financing risk assessment (Article 3(1)(შ)).

On conduct, a VASP may not provide services in anonymity-enhanced coins or privacy coins, or using technological methods that impede identification and traceability of transactions and counterparties on the distributed ledger (Article 8(2)). Before commencing activity it must implement an electronic system, proportionate to the nature and volume of its business, that detects suspicious and unusual transactions automatically by processing DLT-based information (Article 8(3)).

Since 1 January 2026, following Order No. 266/04 of 25 November 2025, a VASP must display the National Bank's individual administrative act confirming its registration prominently and accessibly in every channel through which it provides services, including its website and mobile application (Article 7(15)).

As an accountable entity under the Law of Georgia on Facilitating the Prevention of Money Laundering and Financing of Terrorism, a VASP is supervised by the National Bank and applies customer due diligence to occasional transactions at a materially lower threshold than other obliged entities: USD 1,000, EUR 1,000 or GEL 3,000 for virtual asset services, against GEL 15,000 generally (Article 11(1)(ბ)).

Fees and timeline

The state registration fee payable to the National Bank is GEL 5,000, set under Article 7(1¹)(თ) of the Law of Georgia on Registration Fees and evidenced in the application under Article 3(1)(ნ) of Order No. 94/04. Incorporating the Georgian company at the National Agency of Public Registry costs GEL 200 at standard speed. Notarial certification, apostille and certified Georgian translation of foreign documents are additional and are borne by the applicant (Article 3(2)).

The National Bank decides on registration or refusal within 60 calendar days of submission of the complete application package. That period is suspended from the day the National Bank sends a request for correction of deficiencies or for additional information, and resumes when the applicant responds. The National Bank may, with reasons, extend the decision period by a further 60 calendar days (Article 3(10)). Where deficiencies are identified, the applicant is given 30 calendar days to cure them (Article 3(8)).

A realistic end-to-end timeline, from incorporation and banking onboarding through preparation of the internal control framework, filing, decision and commencement of operations, is two to four months. The principal variables are banking onboarding and the completeness of the initial filing.

There is one point on which Georgia compares favourably with most alternatives: Order No. 94/04 imposes no minimum regulatory capital requirement on a virtual asset service provider. Registered payment service providers are subject to a supervisory capital floor under Article 15(4) of the Law on Payment Systems and Payment Services; VASPs are not. For a gateway structuring the exchange leg in Georgia and contracting the settlement leg to an existing licensed institution, that is a material difference in start-up cost.

Two obligations that bite after registration

Registration is cancelled where the provider has not performed any virtual asset service within six months of registration, or has ceased activity for more than six months (Article 6(1)(მ)–(ნ)). Registration is also cancelled where the provider does not perform the service in accordance with the scheme it submitted (Article 6(1)(პ)), which is why changes to the settlement chain must be notified to the National Bank at least 30 calendar days in advance under Article 5(1)(ზ) and 5(2). Replacing an acquirer is a scheme change, not an operational detail.

Where registration is cancelled on certain grounds, including submission of inaccurate information, the entity and its beneficial owners may not apply again, directly or through a connected person, for three years (Article 6(4)(ა)).

Frequently asked questions

Is it legal for a Georgian merchant to accept cryptocurrency for goods and services? Not as a direct payment. Article 39¹ of the Organic Law on the National Bank provides that virtual assets are not legal tender and that payments in virtual assets are prohibited outside cases defined by the National Bank as necessary for the provision of virtual asset services. The merchant can, however, be settled in fiat through a chain in which a registered VASP performs the exchange and a licensed payment institution performs the settlement.

Does a crypto payment gateway need both VASP registration and a payment services registration? It needs both functions to be authorised, but not in the same company. Article 52⁵(4) of the Organic Law confines a VASP to virtual asset services and necessary ancillary activity, and Article 13¹(1) of the Law on Payment Systems and Payment Services confines a registered payment service provider to payment services and an enumerated list of adjacent activities that does not include virtual asset services.

Can the gateway pay the merchant directly from its own account? No. Paying a merchant under a contract with that merchant is acquiring within Article 2(ჰ7) of the Law on Payment Systems and Payment Services, which a VASP is prohibited from performing. Under Article 1(7) of Order No. 94/04 the gateway remits the converted fiat to the recipient's payment service provider, an intermediary provider, or an acquirer or sub-acquirer within the scheme.

Is VASP status a licence or a registration? A registration. The National Bank maintains a departmental register of virtual asset service providers and enters the provider's details within two working days of the decision (Article 3(15) of Order No. 94/04). The registration authorises only the specific virtual asset services listed in the application.

How much regulatory capital is required? Order No. 94/04 sets no minimum capital requirement for virtual asset service providers. The National Bank does examine the source of the applicant's capital and the beneficial ownership structure under Article 48(4¹)(ა) of the Organic Law.

Can a Georgian VASP serve merchants and customers outside Georgia? Yes, subject to the counterparty restrictions in Article 8(1) of Order No. 94/04 and to the law of the jurisdictions being served. The business plan must nonetheless demonstrate that the applicant intends to carry on the activity on the territory of Georgia (Article 3(1)(ღ)), and the head office and management presence requirements in Article 7 apply regardless of where the customers are.

What is the most common reason applications on this model are refused? A transaction scheme in which the applicant itself receives and holds merchant funds and settles the merchant. Article 3(9)(გ) permits refusal where the submitted scheme shows that the planned activity does not correspond to a virtual asset service as defined in the Organic Law. Identifying the settlement partner and securing its consent before filing, as anticipated by Article 3(6), avoids the problem.

Legislation referred to in this article

Organic Law of Georgia on the National Bank of Georgia, Articles 2(ჰ11)–(ჰ14), 39¹, 48 and 52⁵, as amended by Law No. 1790-IXმს-Xმპ of 9 September 2022.
Law of Georgia on Facilitating the Prevention of Money Laundering and Financing of Terrorism, as amended by Law No. 1791-IXმს-Xმპ of 9 September 2022.
Law of Georgia on Payment Systems and Payment Services No. 6304-Iს of 25 May 2012, Articles 2, 13, 13¹, 15, 18 and 20².
Order No. 94/04 of the President of the National Bank of Georgia of 13 June 2023 approving the Regulation on the Registration, Cancellation of Registration and Regulation of Virtual Asset Service Providers, as amended by Orders No. 376/04, No. 388/04, No. 266/04 and No. 5/04.
Order No. 155/04 of the President of the National Bank of Georgia of 2 September 2020 approving the Card Instrument Regulation.
Law of Georgia on Registration Fees, Article 7(1¹)(თ).

Author: Zurab Loria Attorney-at-Law, Managing Partner at L&L Consulting