The crypto business is thriving rapidly in Belarus, making it stand strong among other countries in terms of crypto adoption globally. This article explores what makes Belarus a haven for blockchain and crypto activities.
A country in Eastern Europe, Belarus was formerly referred to as the White Russia or Belorussia. It attained independence in 1991 and was the smallest of the three Slavic countries in the Soviet Union. The other two included Russia and Ukraine. However, Belarus has become a famous country, especially due to its stand in Blockchain and cryptocurrencies.
The crypto press and various enterprises have chosen Belarus and its superficially positive reception towards blockchain and cryptocurrency in the past years. News was made and hit the headlines about Belarus using nuclear power to mine Bitcoin, and Alexander Lukashenko, the sitting president of Belarus, signing a decree to legalize initial coin offerings (ICOs) and cryptocurrencies, among others.
According to a global crypto adoption report by Triple-A, approximately 3.73% of Belarusians own cryptocurrencies. That’s around 350,000 people of Belarus’ total population. Though it’s not the best in terms of crypto adoption, what makes Belarus a haven for crypto?
Crypto Regulations in Belarus — Why It’s a Crypto Hub Nation
Regarding the development of business, Belarus leads other CIS nations, such as Ukraine and Russia. On December 21, 2017, the Belarus president signed a decree, “The Development of a Digital Economy.” The law came into effect on March 22, 2018, and since then, businesses using blockchain technology have become legally regulated in Belarus. Without a doubt, the decree has helped modernize Belarus and has put the nation firmly on the global crypto map. But, what exactly is contained in the decree document?
Legalizing Crypto Business
The decree legalizes cryptocurrencies, smart contracts, and ICOs. Enterprises can transact with tokens only if they are residents of the High Technologies Park (HTP), a special economic zone on the beltway surrounding Minsk’s capital. Also, other companies can perform operations with tokens in Belarus via residents of the HTP.
HTP’s favorable legal framework and reduced tax rates have established fertile grounds for businesses, especially IT-related. Moreover, the HTP permits firms to register in it while having their Belorussian offices somewhere else in the country.
Zero Tax with No Restriction
In Belarus, activities like mining, alienation, and acquiring tokens performed by individuals are regarded as non-entrepreneurial, and tokens are not subject to declaration. Besides, HTP-registered businesses that carry out mining activities, creation, alienation, and acquisition of tokens are tax exempted.
Also, the decree doesn’t impose any special requirements and restrictions for the alienation, storage, placement, creation, and exchange of tokens, or any crypto platforms or crypto exchanges activities. This implies that one can mine, create, trade, and store cryptocurrencies without seeking permission from anyone or any legal authority.
Key Crypto Events/Projects in Belarus
Reforms in the Current Crypto Laws
Apart from the signing and enforcement of the Development of a Digital Economy decree, the Belarus President mentioned changing the current crypto regulations early this year. According to a report by Belta, a Belarusian news agency, Though there haven’t been any criminal cases resulting from crypto usage, the country’s president feels there is a need to change the rules since there are new rules that have been established globally to curb financing terrorism, money laundering, and any other illegitimate activities.
Launch of Crypto Exchange Services
Another important event was the launch of the crypto exchange service by the Belarusbank, the country’s largest financial institution. Prime Press, a local news agency in Belarus, reported on November 12, 2020, that the bank was rolling out a service to enable crypto to exchange their crypto using a Visa card. This will allow trading cryptocurrencies against fiat currencies, such as the Belarusian ruble, Euro, and the United States dollar.
Apart from the bank’s crypto exchanges, there are other permitted exchanges in Belarus. As a result of the Decree on the Development of the Digital Economy, the registration of crypto exchanges was eminent, but under rules set out to oversee the same. Some of the permitted and locally established crypto exchanges include Free2X, Currency.com, Finstore, and Whitebird. Others include CEX.io, Coinmama, Paybis, Best Change, and Bitcoin ATMs.
Traders to Purchase Shares with Bitcoin
In January 2019, Belarus launched a platform permitting traders to participate in foreign exchange, buy gold, shares, and other traditional securities with cryptocurrencies. The platform is regarded as the world’s first regulated tokenized securities exchange, which was initiated by two IT-based investment firms, Larnabel Ventures, and VP Capital.
“This is the first platform in the world where crypto investors will be able to diversify their investments into real assets,” said Viktor Prokopenya, Owner of VP Capital.
What Does The Future Look Like?
We can say the future for cryptocurrency and blockchain looks promising in Belarus. The government of Belarus is exploring new ways to capitalize on cryptocurrencies, including a possible move into crypto mining. Through Minister Viktor Karankevich, the Ministry of Energy mentioned that the cryptocurrency mining sector is rapidly growing across the globe and that there was a need for Belarus to tap into the industry.
This is a new direction for us now. It’s interesting, but to get started with it, we have to conduct a detailed study of this issue, including an assessment of possible risk associated with this kind of activity. We’re on this.
According to Coin Telegraph, in early September 2021, the Belarus president urged citizens to start mining crypto rather than work abroad, citing that the county has enough electricity to participate in mining activities.
With legalized crypto activities, coupled with many government efforts to maximize the crypto space, there is no doubt that cryptocurrencies will continue to thrive in Belarus. However, we look forward to seeing if the zero tax rate and no restriction caveats will be supported past 2023, where the deadline of their applicability expires.