Home / Banking / Do Bitcoins Threaten Georgia’s Economy?
Do Bitcoins Threaten Georgia’s Economy?

Do Bitcoins Threaten Georgia’s Economy?

The second Bitcoin’s processing datacenter has opened in Georgia. While the virtual money are new even for developed countries, more unusual it is for Georgia where local economists are more skeptical toward this cryptocurrency.

So, they believe that electronic money is not controlled by any central bank  that gives a lot of opportunities for illegal transactions. First bitcoins appeared in Georgia on the initiative of the Georgian Co-investment Fund (GCF)  which allocated $ 20 million to build a processing center in the city of Gori.

A year later the company BitFuri launched a data center in the free economic zone on the outskirts of Tbilisi. According to the company’s representative  Efrem Urumashvili, they studied  the situation in Georgia for  more than a year.

“The company’s management is satisfied with  its activities. The data center in Gori allowed  investors to show more  interest in Georgia and made  additional investments in the amount of $ 30 million in the construction of  another processing center in Tbilisi,”  he notes.

In his words, at present capitalization of Tbilisi FIZ  reaches $ 30 million and investors are working to attract other high-tech companies in the free economic zone.

BitFuri interested in Georgia because of its geographical location, tax regime and low cost of electricity in comparison with developed countries. Our company’s entry into  the Georgian market will encourage other investors,” said Ephraim Urumashvili.

However, the questions remain, in particular, what are the possible consequences for Georgia?

The main thing that distinguishes Bitcoin from other digital currencies is decentralization. Cryptocurrency is not tied to any address, country or company. This decentralization makes the state control almost impossible. Libertarians believe that citizens are not able to trade currencies due to  the tight control from the state.

Bitcoins are not acceptable for many countries, for example, the National Bank of Bolivia  has banned all transactions in currencies uncontrolled  by the state. According to the expert Demur Giorkhelidze, bitcoins are  a very risky currency that can be used for money laundering, as it is completely uncontrolled.

However, Efrem Urumashvili claims  that bitcoins are  not dangerous, and  the lack of awareness gives rise to talk about money laundering.

“Electronic money is prohibited only in Bolivia, Venezuela and North Korea. But in the United States and Europe Bitcoins bitcoins are recognized as an official means of payment. As for money laundering, such cases have indeed been recorded, but the culprits are already sitting in prison. The Treasury of Britain recognized Bitcoin the safest currency in the world. Yes, you can use it to carry out covert operations, but at the same time it is very easy to  investigate  them,” he points out.

According to him, today it is impossible to determine how many Bitcoins were used in Georgia since cryptocurrency has no boundaries.