Implementation Guide (Regulatory-aligned)

How the demo maps to the supervised Phase 1 configuration (sandbox lab) and sets up Phase 2 and Phase 3 without breaking prudential guardrails.

Regulatory status

This is a technical demonstration. Production requires NBG admission (sandbox/controlled perimeter), a licensed bank/broker as issuer/placement agent and registrar, fiat-only settlement, and the registrar database as the Official Register with the DLT ledger as a mirrored audit trail.

1. Regulatory and institutional pathway (Phase 1)

Phase 1 is a supervised lab inside the system: professional investors only, one host bank/broker, fiat settlement, and DLT as operational infra (not the legal register).

1.1NBG sandbox admission with issuance/investor caps and a standardised reporting template (positions, flows, incidents, AML flags).

1.2Licensed bank/broker acts as issuer/placement agent and registrar (or appoints a licensed registrar); all KYC/AML and investor categorisation done by supervised entities.

1.3Legal opinion: each instrument is a Georgian-law dematerialised SME note/bond; DLT is an audit mirror; Official Register prevails.

1.4Operating playbook filed with NBG (whitelist controls, exposure caps, rectification powers, reconciliation/anchoring cadence).

2. Technical integration (Phase 1 posture)

2.1 Token and identity controls

ERC-3643 (T-REX) gates every transfer; registrar/controller retains rectification powers bounded by law.

require(whitelist.isProfessional(investor));

require(exposureCaps.withinIssuerLimit(investor, amount));

require(compliance.canTransfer(from, to, amount));

// registrar can execute court-ordered rectification/forced transfer

2.2 Register architecture

Official Register: registrar/CSD-linked database (prevails on dispute).

DLT mirror: ERC-3643 state + periodic hashes anchoring the register; reconciliations logged.

On discrepancy: rectify per statutory process, then resync DLT state.

2.3 Settlement flow (fiat only in Phase 1)

Initiation:pain.001 / bank payment file

Confirmation:camt.054 or MT910 (credit advice)

Reconciliation:Match settlementRef/MsgId; anchor hash on-chain

DvP:Mint/transfer only after confirmed funds

3. Compliance and monitoring

3.1 Investor eligibility

Professional / sophisticated investors per NBG criteria (whitelisted on-chain).

Qualified institutional buyers (foreign) via host bank/broker checks.

Diaspora or foreign HNW access only via wrappers issued under their home regime (Phase 2+).

3.2 Transfer controls

R1.Whitelist-only transfers; hard block to non-eligible addresses.

R2.Per-issuer and per-investor exposure caps enforced on-chain.

R3.Optional lockups and consent layers configurable per issuance.

R4.Registrar/controller can execute rectification per court order/regulation.

3.3 Audit trail

State changes, compliance decisions, and reconciliation hashes are logged for supervisory read access.

Holder registry T+0 per transaction (Official Register + hash on-chain).

Payment confirmations matched to settlementRef/MsgId/UETR.

Compliance module decisions (approved/rejected transfers) with reason codes.

Accrual and coupon calculations reproducible from on-chain events.

4. Operational procedures (Phase 1)

4.1 Issuance workflow

Step 1:Issuer submits term sheet (rate, maturity, amount, covenants) to host bank/broker.

Step 2:KYC/AML and eligibility checks; whitelist and exposure caps configured.

Step 3:Smart contract deployed with ERC-3643 controls; Official Register entry created.

Step 4:Subscription window; funds land via bank rails with settlementRef/MsgId.

Step 5:DvP: mint/transfer on confirmed funds; hash of register state anchored on-chain.

4.2 Coupon/redemption flow

T-5 daysSnapshot holders; calculate entitlements.

T-3 daysIssuer funds escrow; bank pre-validates file.

T-1 dayReconcile pay file to register; stage settlementRef.

T dayExecute payments; emit on-chain events with matching references; anchor hash.

4.3 Default management

If issuer misses payment after grace:

1. Emit DefaultEvent; suspend secondary transfers.

2. Registrar freezes register per instruction; Official Register is source of truth.

3. Noteholders may appoint administrator per Georgian insolvency law.

4. Platform provides evidentiary holder registry and payment logs for recovery.

5. Signals to external stakeholders (Phase 2/3 outlook)

For DFIs and regional issuers

Standardised SME credit rail (ERC-3643 + Official Register mirror) with clear prudential perimeter; enables anchored allocations into pools in Phase 2 and regional issuance in Phase 3.

For supervisors (NBG/BIS peers)

Evidence on how a small open economy can run tokenised debt under securities law, with DLT as infra first, and optional Digital Lari DvP and DLT register recognition later.

Document status: Demo copy | Updated: November 2025
Contact: compliance@kbb.ge
Disclaimer: Illustrative only. Production requires NBG approval, licensed bank/broker participation, and final legal counsel review.