European Commission: Georgia’s financial regulatory framework moving closer to EU standards

The National Bank of Georgia on Saturday said that the European Commission had positively assessed the reforms implemented by the central bank in recent years, as well as the country’s macroeconomic stability, in its 2026 Georgia Report.

According to the National Bank, the report highlighted Georgia’s sound monetary policy, strong fiscal performance, improved external position and growing international reserves. In July 2026, the country’s gross international reserves reached a record $8.1 billion, exceeding the International Monetary Fund’s reserve adequacy benchmark.

The European Commission also positively assessed the resilience of Georgia’s banking sector. In April 2026, non-performing loans accounted for 2.6% of total loans, while the banking system’s capital adequacy ratio stood at 22.2%. Deposit dollarisation also declined by three percentage points to 48.6%.

Particular attention was paid to progress in financial sector regulation and supervision.

The report welcomed amendments empowering the National Bank to exercise prudential supervision over virtual asset service providers, as well as new regulations for stablecoins and crypto-asset service providers aimed at aligning Georgia’s framework with the EU’s Markets in Crypto-Assets Regulation (MiCA).

The report further highlighted measures to strengthen banking sector resilience, including an increase in the minimum requirement for own funds and eligible liabilities (MREL) for systemically important banks from 10% to 15%, and the introduction of contributions to the resolution fund.

The European Commission further welcomed initiatives to promote sustainable finance, including the launch of a Green Loans Data Dashboard and updated environmental, social and governance (ESG) reporting requirements.

Other developments included improvements to payment services regulation, stronger financial supervision, measures to combat money laundering and terrorist financing, and the adoption of the Law on Factoring to improve access to finance for small and medium-sized enterprises.

However, the report noted that Georgia’s non-bank financial sector remained relatively small despite recent growth, identifying further development of capital markets and the insurance sector as key priorities for diversifying the financial system and expanding alternative sources of financing.