"Now is a crucial moment for the development of the cryptocurrency ecosystem both for the country and individual investors. In 5-6 years, everything will be too late and we’ll remain a backward ecosystem due to unmade secondary and medium decisions at the regulatory level", - crypto lawyer, regional managing partner of Cryptobank Yield App Levan Bodzashvili said in air of the radio Commersant. According to him, the government’s support is needed to make something new popular, I mean the appropriate strategy and vision to which the business will adapt.
Commersant spoke to Levan Bodzashvili about the challenges and prospects of the Georgian cryptocurrency market.
Georgia is considered to be an interesting country for crypto-currencies, our country is the fourth among the most crypto friendly countries. What could have caused all this?
Levan Bodzashvili, crypto-lawyer, regional managing partner of Cryptobank Yield App: since the summer the National Bank has launched digital asset service licenses. In the last 2-3 years, the ecosystem has been growing, young people are becoming interested, many startups are trying to establish themselves and create business models. In general, the cryptocurrency ecosystem is slowly but developing as well as large global companies are showing interest in the country - Binance, Tether, USTEC giant stablecoins have entered Georgia. All the projects carried jointly with Georgian partners boost turnover growth in the entire ecosystem.
Honestly, I doubt in Georgia’s position in the rating of the most crypto friendly countries. There are ratings where Georgia is the first but this is conditional. I don't think so. Now I am in Dubai and is watching such a miracle that I can’t even imagine that the Georgian ecosystem can even come close to it. Billions are being spent in this area, there is no global company that has not come here.
What needs to develop the cryptocurrency market in the country?
By the way, the cryptocurrency and blockchain ecosystem need to be better understood. According to the indices, Singapore ranks first in technology adoption not because Singapore has better technology than Japan or America, but because of the government's absolutely motivated approach.
A lot must be done to catch up with these countries. At least 25 steps are to be taken at the legislative level.
Why do our startups develop slowly? Because in the country there is no free capital that would be interested in investing in this area. For this reason, most startups are looking for funds abroad. The government should take technological and legal steps to bring medium companies into the country. We should focus not only on large companies, but also on medium and small ones.
There are only a few countries with fully organized system - Luxembourg, Liechtenstein, Switzerland, Dubai, Singapore, Malta. They are small countries with such strong ecosystems that everyone is interested in doing business there.
Speaking about the problems in the market, you mentioned the development of regulations by the government and the lack of local capital, what are some other callenges?
The main problem is lack of vision. At the government level we are not informed about the latest global trends. For example, if we create patent on blockchain technologies, we will have such a competitive advantage over other countries, you can’t even imagine. Many technical problems can be easily solved by adopting internal regulatory guidelines. This is one challenge.
The second challenge is the lack of capital. Those big companies, banks, who have capital, have technology groups so they are less interested in pouring money in startups. This money is accumulated in banks and due to this, new startups develop slowly.
The third problem is that businesses have not yet got, or don’t want to get the profitability of this technology while the world is experiencing a gold rush in this regard. Everyone- starting from the largest banks ending with small startups- is eager to fill this niche.
A very important challenge is the third one - we still remain a country with a centralized economy. The government’s support is needed to make something new popular, I mean the appropriate strategy and vision to which the business will adapt. In 5-6 years, everything will be too late and we’ll remain a backward ecosystem due to unmade secondary and medium decisions at the regulatory level. The government does not need to take specific financial steps; it should create an appropriate regulatory environment, a regulatory ecosystem that business will develop itself. There are many examples of this in the world.
