The FINANCIAL — What should we expect in the next few months?
With the implementation of block chain technologies, commercial banks will significantly reduce revenues while transacting, and this will reflect on financial state of the population, Giorgi Shervashidze, Founder and CEO of AISI Coin, told The FINANCIAL. This might be a reason why the National Bank of Georgia does not move forward with the crypto regulations. Meanwhile Georgians have started paying Khachapuri bill by crypto coins.
Similar to the rest of the world, demand for cryptocurrencies in Georgia is constantly growing. According to recent statistical observations, demand for cryptocurrencies in Georgia has increased about threefold. In terms of mining, Georgia is in third place. In most cases, the focus is on Bitcoin mining. Bitcoin light coin is the most highly demanded cryptocurrency, so the practice shows.
“The National Bank is in the process of observation, so as to be able to draw on the example of foreign countries. Our desire is to cooperate constructively and to support the block chain integration process. However, it is necessary to note that the National Bank is lobbying commercial banks,” Giorgi Shervashidze, Founder and CEO of AISI Coin, said to The FINANCIAL.
“Accordingly, neither is the capital market developed. With the implementation of block chain technologies, commercial banks will significantly reduce revenues while transacting, and this will reflect on the income of the population. For instance: if the utility taxes we pay are just 0.5 tetri and yet this equates to a huge loss of money. With cryptocurrencies, it is possible to charge the minimum possible commission or even make it free of charge altogether. Transactions by AISI Coin are free of charge. Therefore, the National Bank must maximally integrate this technology with the existing system or completely change it,” Shervashidze said.
“AISI Coin’s development and progress is based on its unique ecosystem. With the speed of transaction, it does not fall short of any cryptocurrencies and makes 6000 transactions a second. It is based on a POS system (meaning no need for mining). In the case of Bitcoin, if I send you the money, I add a commission to prove that the miner can confirm and get it. However, a transaction by AISI Coin is absolutely free, without any commission!”
“Also, the above-mentioned ecosystem includes lending (investment platform). I want to underline an important fact here – that we are working on offline transfers, which are easily payable by plastic cards without being connected by a network,” Shervashidze told The FINANCIAL.
AISI Coin is a stock product and is an interesting tool for traders. An increase in the facilities that will use AISI Coin as a payment method, will contribute to an increase of its liquidity.
“AISI Coin reduces the companies’ banking terminal service commission (zero). Those who are engaged in mining will be able to sell or spend bitcoin for an adequate price, which means at least USD 300 guaranteed per bitcoin,” Shervashidze said.
According to Shervashidze, AISI Coin is an alternative source of investment, in which, unlike banks, financial or material ensuring is no longer needed.
“Funding is done through Token (digital share), which will be written on AISI’s block chain and allows one to bring global investments, because block chain has no borders. It’s a unified global network. The development of the capital market is the main opportunity for an investment platform in Georgia,” he said.
Nowadays there are huge percent to buy or change crypto. More exchange facilities will result in valid competition on the market. Nowadays, there are only a few companies operating on the Georgian market and we offer the lowest percent to customers out of all of them.”
“What’s crucial is the correct regulation of digital assets in Georgia (implementation of AML policy, investor protection). The outcome – tokenization of current companies or Startup projects. This will not be just a local process – a crypto liberal reform will bring companies from the global space, which will result in the development of the capital market and the real sector of the economy. All of this will positively reflect on the Georgian LARI, as well as the growth of job rates.”
“There are some main problems that can hinder its quick spread”, According to Vakhtang Gogokhia, CEO and Founder of Golden Fleece. “The first is the absence of legislative framework. In terms of this problem we cannot blame the Government because it’s a global problem. This area is relatively new and has just begun its first steps on the legal side of cryptocurrencies worldwide. Our government is actively working on this issue.”
“Another problem is the banking sector’s neglect of crypto businesses. A very few number of banks say openly that they are working with crypto businesses. It is logical, the banking sector views cryptocurrencies as a potential threat and a competitor. However, some of the largest banks, such as Goldman Sachs, have bought the crypto stock Poloniex through a subsidiary company, and the crypto company Litecoin Foundation has bought a share in the German WEG Bank. The above-mentioned and other agreements point to the expected wave of mergers and acquisitions between these two areas,” Gogokhia told The FINANCIAL.
National Bank of Georgia is going to set regulations on cryptocurrencies.
As Gogokhia says, “the philosophy of cryptocurrencies is built on decentralized management and its architecture makes it impossible to institute control over it. The only control leverage is to ask a financial institution or a crypto stock-market to identify clients at the moment of changing crypto for money. America has already requested similar information to collect tax exchanges,” he said.
“There is considerable movement by the National Bank of Georgia to figure out the status of digital currency in Georgia,” Andrew Tronhill, Co-founder of Spotcoin, commented.
“I think that it is very likely that we will have some kind of positive resolution from NBG, and that it might come this year, but if not then for sure in 2019. I think we have to be careful when talking about the word ‘regulation’. Right now, digital currencies are not regulated at all in Georgia and while this might seem like a good thing, what it means is that government institutions and Georgian banks have little to no direction on how to address digital currencies.”
“I think that what Georgia needs to do is to figure out how to address digital currency – at the very least on some basic level. Then give direction to the local banks on how to treat digital currencies and digital currency transactions and then determine if they want to further regulate or tax them. I am against strong regulations of digital currency and of course against the taxing of digital currency transactions, but I am very much in favour of government guidance on digital currencies in general,” Tronthill said to The FINANCIAL.
According to Shervashidze, the inflow of foreign capital is good for commercial banks. “In general, this is an inevitable process. Cooperation between different institutions will have great importance for the development of the country. Today we need to follow the future step by step,“ he said.
DEAG has clearly defined objectives and tasks that include the promotion of digital business culture; stimulating and supporting the business environment; preparation of the investing platform; promoting capital market development; integration with different systems blocking technologies, and for this purpose – cooperation with state and/or private structures, the introduction of digital assets and digital electronic currencies, preparation of specific legislative initiatives and other innovative projects.
Discussion about this post