Belarus is slowly becoming a crypto hub
Among the various developments happening in Belarus in relation to cryptocurrency is the latest announcement from Belarusbank. Viktor Ananich, the Chairman of Belarusbank’s board, has revealed that Belarusbank, the largest bank in Belarus, is considering the possibility of launching a cryptocurrency exchange.
He was speaking with Belarus 1 TV channel adding that they are "working on it." Ananich said digitalization is one of the bank's areas of focus this year.
In addition to the possibility of launching a crypto exchange, the bank wants to expand its range of services by working with mobile services providers. For instance, they want to issue a virtual card in the near future.
He said digitalization is something new for the banking sector, which has always been very dynamic, adding that "things are changing very fast" currently and they need to keep up with them.
Belarusbank’s initiative may go quite well considering that the country has already legalized crypto-related activities: last year, President Alexander Lukashenko signed a presidential decree that introduced comprehensive legislation for the legalization of the crypto activities in the country. The directive, which came to effect on March 28, 2018, was in a bid to encourage a digital economy in the country.
The decree also introduced tax reliefs for crypto-related businesses and this relief will run until January 1, 2023. It does not include any restrictions or special requirements for the creation, issue, storage, sale or exchange of digital tokens, as well as operation of cryptocurrency exchanges and platforms. Individuals are not required to declare incomes from digital tokens and there is no personal income tax from mining, acquisition, and sale of digital tokens.
President Lukashenka said at the signing of the decree that the move was aimed at attracting foreign investors into a regional center for blockchain technology and added that he wanted to create conditions to encourage global IT firms to set up branches, research centers, and production facilities inside Belarus. The decree may, therefore, as well make Belarus an important crypto hub in the coming months.
Not only has the regulatory change through the decree lead to more local entities venturing into the crypto industry but also an increased number of international businesses may be establishing their businesses there. For instance, Bitcoin.com reported last November that Belarus Hi-Tech Park was one of the focus locations for a number of crypto businesses.
By November, the number of businesses registered to operate in the special economic zone had reached 388, eight months after the president's decree. However, the decree requires that a legal entity that creates and issues a digital token through a resident-company of the Hi-Tech Park shall meet the requirements for the holder at the time of creation and issuance. The country became the first to legalize smart contracts in crypto.
The decree legalized a variety of crypto businesses such as digital asset exchange, crowdfunding through initial coin offerings (ICOs) and cryptocurrency mining for entities that are registered in the HTP. Most of the crypto businesses operating in the region specialize in IT, software development and other hi-tech sectors and are working with customers in 67 other countries, often as outsourcing partners.
Many of these crypto-related businesses are already residents of the park, which exempts them of all corporate taxes. However, despite the increase in the number of crypto businesses, there was still a shortage of digital asset trading businesses among the residents of the Belarus High Technologies Park with the first crypto exchange Crexby being based in New York, not in Minsk. Currency.com also was announced as "world's first regulated tokenized securities exchange" during its launch on January 15 this year.
The online service will allow users to exchange different types of cryptocurrencies as well as to sell and buy them for national currencies. It was the first to receive Hi-Tech Park license to offer professional cryptocurrency market services and will issue over 10,000 tokenized assets, each matching the base market of conventional financial instruments such as securities, indexes and raw materials.
Users can buy into and invest in them using cryptocurrencies through a website or app. It has already issued 150 types of tokens corresponding to financial instruments. It will also be selling shares for different companies as well as shares for companies in gold, oil and metal markets.
These few examples signify that Belarus may slowly become a crypto hub, having taken a completely different but certain approach by legalizing crypto and related businesses, although more is still needed in terms of regulation to further encourage the flourishing of crypto businesses.