Belarus adopts cryptocurrencies

MINSK: Belarus has legalised transactions in cryptocurrencies, part of a drive to foster private sector growth and attract foreign investment by liberalising parts of its Soviet-style economy.

President Alexander Lukashenko signed a decree on the move this week, his press service said.

Bitcoin, the world’s most popular cryptocurrency, has lost a third of its value since hitting a record high of close to $20 000 (R255 000) last Sunday, but its supporters dismiss warnings over volatility and say it is the start of a new monetary system not dependent on central banks.

“All smart and intelligent people know what stability and order are,” state news agency BelTA quoted Lukashenko as saying earlier.

“They’re all trying to reach that shore. We’re prepared to arrange a dock and even a harbour.”

The former Soviet republic, squeezed between Russia and the EU, is still dominated by the state, weighed down by bureaucracy and inefficient state-owned enterprises and dependent on Russian money and subsidies.

But Lukashenko, a former collective farm manager who once called the internet “garbage”, has introduced some reforms to improve the business climate and shore up the economy after recession in 2015 and 2016.

Belarus has developed some globally recognised IT brands, belying an image of a country stuck in a Soviet time warp.

The decree is designed to attract digital coin entrepreneurs, who are moving businesses to locations more welcoming to cryptocurrencies as they face intensifying scrutiny from regulators over digital currency fund-raising, known as initial coin offerings.

“The decree is a breakthrough for Belarus,” said Anton Myakishev, the head of Microsoft 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.”

The decree legalises initial coin offerings and transactions in cryptocurrencies, including their exchange for traditional currencies on Belarussian exchanges, while all trades will be tax-free for the next five years.

It allows local IT companies to operate in part under English law, a boon to potential foreign investors. – Reuters