Belarus Follows Russia in Cryptocurrency Legalization Move

Belarus’ authorities recently announced that cryptocurrencies use will be legalized in the state. The decree signed by Belarusian president Alexander Lukashenko legalizes cryptocurrencies, initial coin offerings, and smart contracts, and will enter into force in March. Cryptocurrency activities are not restricted by the decree and will be tax exempt until 2023, reported.

The rise of virtual currencies is pushing governments around the world to come up with new rules. Some countries have banned bitcoin and other cryptocurrencies outright. Others, including Venezuela and Russia, reportedly are looking to create state-sponsored cryptocurrencies as a way to get around economic sanctions.

Belarus’ move follows similar news from Russia where a bill to legalize cryptocurrency trading is being drafted by the Ministry of Finance, according to reports. Russia will attempt to regulate and standardize cryptocurrency trading, allowing it to take place in regulated exchanges.

Russia has long been on the fence about cryptocurrency, with Vladimir Putin alternatively calling for a Bitcoin ban and admitting it has practical value. Russian authorities have previously been concerned about the ability of Bitcoin to fund illicit activities, like drug smuggling and terrorism. In 2017, the Bank of Russia tried to block internet access to exchanges. Russian deputy finance minister Alexey Moiseev labeled Bitcoin “a pyramid scheme.”

However, attitudes towards Bitcoin are thawing in Russia. Putin met with Ethereum creator and native Russian Vitalik Buterin in 2017. In a statement, Putin conceded:

“[Cryptocurrency] can be a settlement medium to a certain degree and in certain situations. This is done quickly and efficiently.”

Analysts point out that although the Russian and Belarusian economies share similar traits, the effect of cryptocurrencies could ultimately go down to the environment for doing business the two countries. Belarus’ reputation as a business destination is mixed. The GAN Business Anti-Corruption portal has said Belarus is a country where “officials engage in corruption with impunity, the public administration is opaque, and consequently rent-seeking… some argue that high-level corruption is a method of governance in Belarus.”