The capital requirements that Georgia introduced for virtual asset service providers in August 2026 got most of the attention this year, and they deserve it. But there is a second rule sitting next to it that matters just as much to a certain kind of business. In March 2026, the National Bank of Georgia adopted a dedicated regulation for the initial offering of stablecoins, and it is a much more detailed piece of work than most people realize.

So what does «detailed» actually mean? Take a stablecoin issuer. Before anything else, you have to be a registered VASP and get the National Bank’s written consent for the offering. After that, the reserve rules apply. Whatever you issue has to be backed one-to-one and held apart from your own money, and at least a tenth of it must be in cash or short-term deposits with licensed Georgian banks. Redemption is just as strict. A holder who wants out gets face value back, and you have three business days to pay. Five, if the amount is over GEL 300,000.

 

Who the rule applies to

The rule applies to virtual asset service providers registered with the National Bank of Georgia who want to offer a stablecoin initial coin offering. The offering is defined as issuing a stablecoin and offering it to the public for purchase, sale or exchange.

The definition of a stablecoin is worth reading carefully. It’s a convertible virtual asset expressed or denominated in units whose value is pegged to the Georgian lari, to a foreign fiat currency such as the US dollar or the euro, or to another asset. The rule actually breaks these into three types. A lari stablecoin is backed mainly by the lari, a foreign currency stablecoin by a single foreign currency, and a third category covers coins backed by some other asset serving as the underlying for maintaining value.

Two exclusions matter just as much as the inclusions. A stablecoin does not include the digital representation of cash, securities or other financial instruments. If your product is a tokenized bank deposit or a tokenized bond, this isn’t your rule, and you’ll be working with securities market or payment legislation instead. That boundary is worth settling before anything else, because it decides which regulator you’re dealing with.

A person who isn’t registered as a VASP but wants to run a stablecoin offering has to register first, under the same rule that applies to every other VASP. Even a registered VASP can’t go ahead alone: the rule prohibits any stablecoin initial coin offering in Georgia without the National Bank’s prior written consent. So an issuer faces two approvals, VASP registration first, then consent for the offering itself.

 

What the National Bank has to approve

The consent requirement is broader than many people expect. It isn’t just the whitepaper, though that’s part of it.

Before the offering, the issuer prepares a whitepaper and submits it to the National Bank to obtain consent under the procedures established in the VASP registration rule. The whitepaper must be accompanied by a completed Operational Risk Assessment Form, which the rule includes as an appendix.

The National Bank also has to approve the financial institution where the issuer intends to place its reserve assets. That’s a separate approval from the offering consent, and it’s the National Bank picking apart your custodian arrangement, not just your token design.

There’s a technology gate as well. Together with the whitepaper, the issuer must submit a recent independent audit report confirming compliance with the risk management and cybersecurity requirements, along with other documents the National Bank requests. If that documentation or the penetration testing report identifies critical or high risk vulnerabilities, the National Bank will not grant consent. Suspension or revocation of previously granted consent is technically also possible.

Several other approvals sit in the rule. Any amendment to the terms of convertible debt counted as Tier 1 capital requires prior National Bank approval, and the same goes for amendments to Tier 2 instruments and subordinated debt. Before including any newly issued capital instrument, convertible debt or subordinated debt in the regulatory capital calculation, the issuer needs National Bank approval. Where the total value of reserve assets exceeds GEL 1 billion, the issuer may place reserves in a different share ratio from the standard appendix, but only with National Bank consent, and additional asset types beyond the standard list also require consent.

None of this is a formality. The rule gives the National Bank the power to suspend or revoke the offering consent if the issuer violates reserve or capital requirements, conducts the offering in breach of the rule, submits false or incomplete information, or breaches other legislative requirements. It can also order a full suspension of operations, or restrictions limited to specific assets or persons.

 

What can sit in the reserve

The reserve rules are where the regulation shows its teeth. At all times, the issuer must hold reserve assets worth at least the full nominal value of the stablecoins in circulation. Not at the end of the month. At all times, and the obligation scales as coins are issued.

The base asset list is narrow. A liquid asset is defined as fiat currency and domestic or foreign government securities, and reserve assets must follow the composition requirements in the rule’s appendix, with the National Bank able to consent to other assets beyond that list. Reserves must be denominated only in the currency the stablecoin is pegged to. A dollar coin holds dollar assets and a lari coin holds lari assets. No currency mismatch, no earning a spread by backing a dollar coin with something else.

The management requirements go well beyond holding the right assets. Reserves held in Georgia must be stored with a commercial bank or microbank licensed by the National Bank, and storage of other asset types requires an appropriately authorized and licensed person. The assets must be legally and operationally segregated from the issuer’s own assets, so that in an insolvency they are clearly identifiable and protected from creditor claims where the issuer has creditors other than holders. The rule asks for mechanisms that effectively isolate reserves from insolvency proceedings.

Reserves can’t be encumbered. No mortgage, no collateral, no set off, no debt claim, no recourse by creditors, the custodian or anyone else. The issuer has to be able to access them at any time to meet redemption requests. It must assess the composition of reserve assets daily to confirm compliance.

There’s also a rule about what happens to the income. Income generated from reserve assets must be managed so it doesn’t reduce the required volume or structure of reserves and doesn’t restrict redemption rights. And here’s the part that will surprise people coming from DeFi. The issuer is prohibited from entering into any agreement that shares any portion of reserve income with stablecoin holders or any third party. It can’t offer, promote or publicly disclose any profit sharing, dividend, remuneration or similar scheme that would let holders or others benefit from reserve income, directly or through affiliates or indirect methods.

A yield bearing stablecoin is not a stablecoin under this rule. The National Bank wants a payment instrument, not an investment product. Reserve income stays with the issuer, which is presumably the business model.

 

How redemption has to work

A stablecoin holder doesn’t have to ask the issuer for a favor. Redemption is their right, and it applies whether or not they’re a client. The issuer has to make sure it happens without delays or interruptions.

The deadlines are specific. Once a request arrives, the issuer has three business days to complete redemption at nominal value. If one client’s total request is above GEL 300,000 (or the foreign currency equivalent), that becomes five. If the issuer can’t manage the reserves for reasons outside its control, force majeure included, the clock starts when the problem is resolved. Redemption is then due within three business days.

Non-clients get the same deadlines, but the count starts later. First the issuer carries out enhanced due diligence. The holder also has to meet AML and sanctions requirements and accept the service terms. Only after that do the three or five days begin.

The rule also says when redemption counts as done. For a swap into fiat, it’s done when the transfer is executed under the payment services law. For a swap into another asset, it’s done when the issuer transfers ownership of that asset to the holder.

Fees are allowed, within limits. An issuer can charge reasonable, proportionate redemption fees and set minimum purchase and redemption amounts. But the full conditions, meaning the periods, the fees and any minimums, have to be published in advance.

 

What the whitepaper has to contain

The whitepaper section is the longest in the rule, and it reads like a prospectus requirement. That’s no accident. The National Bank wants anyone buying the coin to have what they need to make an informed decision.

It starts with the issuer. You give your name, legal form, identification number, head office address and contact details, plus your VASP registration number and the date of the registration document. Significant shareholders and the identity and functions of administrators are listed, and so are financial indicators for the last three years, or for the period since registration if you’re younger than that. Governance gets a detailed description. So do any other virtual asset services you provide and everyone involved in the offering: trading platforms, intermediaries, external auditors, legal advisors. You also name every distributed ledger platform the offering will run on and explain your relationship with each.

The stablecoin section comes next. It covers the name, symbol and identifying code, and the coin’s characteristics, including the currency it’s pegged to. It names the target market and any restrictions on who can hold the coin. It sets out what holders need to store it, including compatible wallets, and the volume, issuance schedule and availability, along with minimum purchase and redemption amounts if they apply. The rights and obligations attached to the coin go in too, redemption conditions included.

Then come the security, risk and disclosure sections. This is where the issuer has to be upfront about the backing. The whitepaper needs to say the coin is covered by reserves of at least 100%, confirm they’re kept separate from the issuer’s own assets, and explain any change in what the reserve is made of. Risk gets the same treatment. Market, liquidity, operational, cybersecurity, technological and regulatory risks are all described plainly, along with warning statements and a link to a separate risk disclosure document. Risk management, the technological architecture (hot and cold wallets included) and the complaint and dispute resolution procedures each get their own paragraphs.

There are also mandatory warning statements. One has to appear clearly on the front page, and the rule quotes it: the consent provided on the whitepaper by the National Bank of Georgia relates solely to its format and shall not be interpreted as confirmation of the accuracy of its content. The others say that VASP registration doesn’t confirm the quality of the stablecoin or the issuer’s solvency, that customers should read the full whitepaper before deciding, and that the offering covers only the described stablecoin, not other coins, securities or financial instruments.

Where the whitepaper lives matters too. It goes on the issuer’s own website, in Georgian, in a font people can actually read. Translations are acceptable, but if they ever disagree with the Georgian text, Georgian will win. Every update carries a date, and the older versions stay up in the same place. You also keep records of every version for at least eight years after the stablecoin is withdrawn from circulation.

Advertising has its own article. Ads have to match the whitepaper, and none can go public before the whitepaper is published.

 

The governance and audit load

Two thresholds in the rule change the shape of the issuer. Once the total value of reserve assets exceeds GEL 15 million, the issuer has to meet the full corporate governance chapter, which requires a General Meeting, a Supervisory Board whose members don’t perform executive functions, an Audit Committee, and detailed reporting to the National Bank, including Supervisory Board minutes within ten business days of each meeting. At the same threshold, the quarterly reserve verifications and the annual audit have to be performed by audit firms named in the rule’s appendix.

The quarterly verification requirement applies regardless of size. An independent, qualified external auditor verifies the reserve assets every quarter, covering their composition and market value, the nominal value of the coins issued and the total reserve volume, and the issuer publishes that report on its website. Any material discrepancy or deficiency goes immediately to the National Bank and has to be remedied.

Annual audited financial statements are due to the National Bank by July 15 of the year following each calendar year. Accounting follows IFRS, entries are made in real time under a four eyes principle, the operational day closes no later than the second business day, and accounting and financial records are kept for at least ten years.

The issuer also has to publish on its website the latest reserve information, including composition and total volume, the average maturity of each reserve category, and the total volume of stablecoins issued. That’s a standing transparency obligation, not a one time disclosure.

Cybersecurity requirements mirror what the general VASP rule introduced in August, and some are stricter. Penetration testing of all network connected systems at least once a year and after significant changes, network vulnerability scanning at least twice a year, cybersecurity awareness training and simulations for employees at least annually, and immediate sharing of information with the National Bank about confirmed cybersecurity incidents. The business continuity plan has to include a disaster recovery plan for IT infrastructure, and annual testing is recommended.

 

Capital, briefly

Since our earlier article covered capital in detail, this section stays short. The stablecoin issuer needs minimum regulatory capital of GEL 500,000. Once the total value of reserve assets reaches GEL 1 million, the requirement becomes GEL 500,000 plus at least 2% of the average daily value of reserves over the previous six months, capped at GEL 50 million.

The quality rules are strict. At least 75% of regulatory capital must be Tier 1 elements, and Tier 2 can’t exceed one third of Tier 1. The Tier 1 definition reads like a bank capital definition, with capital instruments that must be perpetual, fully paid, unsecured, not repurchased or financed by the issuer, ranked last in liquidation, and free of any expectation of redemption. Subordinated debt in Tier 2 must have an original maturity of at least five years and amortizes into capital on a straight line basis over its final five years.

If the requirement is breached, the issuer notifies the National Bank immediately and submits a capital recovery plan within five working days, with a possible extension at the bank’s discretion. While in breach, the issuer is prohibited from distributing capital, paying on capital instruments, or incurring obligations to pay variable remuneration or bonuses.

 

What the rule means in practice

A few patterns stand out once you read the whole thing.

The National Bank has written this for payment stablecoins, and only payment stablecoins. The reserve income prohibition, the single currency denomination, the full backing and the redemption rights all point the same way. A founder planning an interest bearing coin or a reserve strategy that earns a spread through currency mismatch has no product under this rule.

The approval surface is wide. VASP registration, whitepaper consent, reserve custodian approval, capital instrument approvals, technology audit gates, and for larger issuers a governance structure the bank signs off on indirectly. Each one is a place where a poorly prepared file loses time.

The ongoing obligations are heavier than the entry requirements. Quarterly reserve verification with public reports, annual audited statements by July 15, daily reserve assessment, standing website disclosures, annual penetration testing and twice yearly vulnerability scans, and eight year retention of whitepaper versions and risk management documentation.

The economics of the business model need honest attention. Reserve income goes to the issuer, and the issuer funds capital, audits, custodians, technology and compliance from it. A stablecoin that never reaches meaningful circulation may not cover its own running costs, and the capital requirement grows with reserves rather than with revenue.

 

Who should consider this route

The rule makes the most sense for an issuer with a clear use for a lari or single currency payment coin. A company running remittances into Georgia, a payroll or merchant payments product, or a platform that needs a stable settlement asset for Georgian users has a genuine case. The lari stablecoin category suggests the National Bank is particularly interested in coins that serve the domestic market.

It’s a poor fit for anyone whose model depends on reserve yield reaching holders, multi-currency reserves, or issuing a coin treated as an investment. The rule forecloses each of those directly.

It’s also worth being clear eyed about the cost of the surrounding infrastructure. Independent audits of risk management and cybersecurity before consent, quarterly reserve verification, an external auditor every year, a licensed custodian, and a governance structure once reserves pass GEL 15 million. None of that is optional at any scale.

For a team that fits the profile, though, the rule offers something rare. A clear, published standard for a lari or foreign currency stablecoin issued under central bank consent, in a country whose AML regime MONEYVAL rated largely compliant in 2024. The requirements are demanding, but they’re written down, and an issuer who meets them has a regulatory story that very few stablecoin projects anywhere can tell.

At Protegra, we spend most of our time on stablecoin projects before the whitepaper exists, working out whether the token, the reserve arrangement and the redemption mechanics can satisfy a rule like this one. The answers usually come from the operational model, not from the token name.

Sources: