Belarus president Alexander Lukashenko has signed a decree that legalizes cryptocurrencies, crypto-mining and initial coin offerings (ICOs). The move is supposedly designed to push the country forward in the ongoing digital race, and garner huge advantages by opening the doors to foreign investments and growth in the private sector.
Entitled “On Digital Economy Development,” the decree explained:
“The main goal is to create such conditions that global IT companies would come to Belarus, open their representative offices and development enters, and create popular products in the world.”
Europe Isn’t Particularly Fond of Cryptocurrency… Yet
If it’s serious, Belarus stands to be one of the first countries in Europe to legalize digital currency.
For the most part, financial entities like bitcoin haven’t been welcomed with continental open arms, and countries like France, the U.K. and Germany are leading efforts to enforce cryptocurrency regulation and crack down on usage out of fear pertaining to money laundering and terrorist activity.
In a recent interview, French Finance Minster Bruno Le Maire described his feelings regarding digital currency:
“I don’t like it. It can hide activities such as drug-trafficking and terrorism. There is an obvious speculative risk. We need to look at it and study it.”
The next G-20 meeting in 2018 is slated to grant central bank regulators and finance ministers the opportunity to discuss bitcoin and the problems it presents to see if legislation is indeed necessary.
But Could Belarus Actually Change Europe’s Attitude?
Belarus now claims it has a different outlook on bitcoin’s growth, probably due in part to the financial crisis it faced in 2011. The central bank’s removal of restrictions on the country’s exchange rate resulted in a near 60 percent drop in value for its national currency.
Prior to that, Belarus was predominantly known for its slow economic growth, inefficient energy tactics and weak agriculture. Belarus also played host to an environment that was described as largely “hostile” to new businesses, and about three-quarters of the nation’s banks were state-controlled.
To cope with the financial crisis, Belarus was forced to sell natural gas pipelines and incur billion-dollar loans from Russia which it is still paying back.
The country has expressed distaste with its current state of dependence and knows all too well that a heavy reliance on fiat can hurt a national economy, and its acceptance of crypto could potentially alter any further negative consequences.
A Rough Patch in History That May Finally End
In addition, the country’s past anti-business attitude may be coming to a close, and state authorities are hoping the now pro-crypto atmosphere will attract foreign investments and startups that specialize in bitcoin and blockchain technology.
Belarus has eagerly been promoting itself as a technology haven, particularly through its High Technologies Park, which it describes as an “economic zone with a special tax and legal regime.”
Belarus is eager to see its IT and digital capacities surge, and have been taking the necessary steps to make this happen. This includes allowing IT specialists to reside in the country for six months without visas, and granting tax breaks to both businesses and individuals who use cryptocurrency.
Eastern Europe’s Latest Tech Burst
Through January 1st, 2023, digital token transactions will be tax-free, and residents will not be subjected to VAT payments if they grant ownership of virtual coins to others.
Belarus’ growth in both the financial and technology sectors points to a healing economy, long-term planning, and a willingness to adapt to change.
Head of Belarus’ Microsoft office Anton Myakishev spoke positively of the recent move by confidently stating, “The decree is a breakthrough for Belarus. It gives the industry the possibility to make a leap forward in its development, and allows foreign capital the possibility to come to Belarus and work in comfortable conditions.”
Is Belarus making the right choice, and if so, will the rest of Europe soon follow? Post your comments below.
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