The Rise of Crypto Payments in Tbilisi
Tbilisi, the capital city of Georgia, has become a hub for cryptocurrency usage, particularly for payments rather than investments. With its strategic location and rich history, the city has seamlessly integrated modern financial technologies into its daily life. This article explores the vibrant crypto culture, key projects and companies, and the financial infrastructure that make Tbilisi a unique player in the global crypto scene.
A Brief History of Tbilisi
Tbilisi was founded in 445 AD, according to legend, when King Vakhtang I of Iberia’s falcon fell into a hot spring and perished. The hot springs and strategic location inspired the king to build a city on the site. Over the centuries, Tbilisi has been influenced by various empires, including the Romans, Persians, and Byzantines. It became the capital of a unified Georgian state in the 12th century under King David IV.
Today, Tbilisi is home to a diverse population, including ethnic Georgians, Russians, Azerbaijanis, Armenians, Ukrainians, and others. The city attracts digital nomads due to its easy visa policies, low taxes, and affordable living costs.
Crypto Culture in Tbilisi
In Tbilisi, cryptocurrency is primarily used for payments rather than investments. Remittances are a significant use case, with USDC and USDT being popular choices due to their low transaction fees and fast processing times. Giorgi Tashurashvili, CMO of local exchange Bitnet, notes that USDC is often used for transactions like buying apartments or sending money in and out of the country.
The city hosts various informal crypto meetups at hostels, bars, and cafes where enthusiasts discuss trading strategies and business ideas. Conferences and hackathons also attract international speakers and participants, fostering a collaborative environment.
Marie Giorgobiani, CEO of Degamefi, mentions that half of the speakers at their conferences come from outside Georgia, highlighting the city’s growing influence in the global crypto community.
Government Support and Regulation
The Georgian government has shown some support for the crypto industry. The Georgian Innovation and Technology Agency (GITA) offers grants to blockchain and crypto startups. However, there is still a lack of understanding among some officials, which poses challenges for the industry.
The government has adopted regulations similar to the European Union’s Markets in Crypto-Assets (MiCA) regulations. While this provides a framework for innovation, some believe that strict adherence to these standards could stifle growth.
Tashurashvili believes that fostering a more flexible regulatory environment could help Georgia become a regional crypto hub.
Key Projects and Companies
Several notable crypto and blockchain projects operate in Tbilisi. Mining giant Bitfury has operations in Georgia, leveraging the country’s cheap hydroelectric power. Ripple has partnered with the government for its central bank digital currency (CBDC) project, the digital lari. Binance has also signed a memorandum of understanding with GITA to promote blockchain education.
Local companies include Degamefi, Bitnet, Arena Games, CityPay, and exchanges like Cryptal, Bybit, Bitget, and WhiteBIT. Media organizations like the Georgian National Blockchain Agency and Crypto Bazari also play a crucial role in the ecosystem.
Financial Infrastructure
Georgia’s banking sector is dominated by TBC Bank and Bank of Georgia, both offering user-friendly payment apps integrated with various services. This ease of use presents a high bar for crypto to compete against. Most businesses in Tbilisi accept card payments, making cash almost obsolete.
Crypto exchanges, often just money changers with a Binance account, are common in the city. These exchanges were largely unregulated until recently, but now comply with Know Your Customer (KYC) procedures and other regulations set by the National Bank of Georgia.
Crypto ATMs are also prevalent, allowing users to buy major cryptocurrencies like Bitcoin, Ether, and Litecoin. However, these ATMs do not support cash withdrawals.
Spending Crypto in Tbilisi
Cryptocurrency payments are becoming increasingly common in Tbilisi. Platforms like Binance Pay and CityPay enable businesses to accept crypto. Over 200 companies, including hotels and restaurants, now accept crypto payments.
Krab Coffee and Bar, located in the bohemian Vera district, is one such establishment. Owners Kristina and Barbie find crypto payments practical, especially for international customers who avoid conversion fees. Russian tourists, who face sanctions on their bank cards, also benefit from the crypto
