Belarus sandwiched in between European Union and Russia has recently imparted a legal tag to Initial Coin Offerings (ICOs) and cryptocurrency payments in a move which targets to bring upon further growth in the private sector and lure in foreign investors to this former communist republic.
Largely dominated by the state, this country handicapped by inefficient enterprises is fully dependent on subsidies and money from its neighbour nation Russia for its normal functioning. The recent crash of the Bitcoin price bubble caused it to fall down the $11000 mark before again bouncing back to $14000, as of publishing this article. But this did not seem to have any effect on Alexander Lukashenko, the president of Belarus who signed the decree on Friday.
According to reports published by Bloomberg, this decree will help transform Belarus into an international tech haven by bringing along legal incentives and tax breaks. Lukashenko, a former collective farm manager had branded internet as “garbage” in the past. But he seems to be quite hopeful about the blockchain mode of architecture which was evident from his statement wherein he was quoted as saying that, “Belarus will become the first government in the world that opens wide opportunities for the use of blockchain technology (…) We have every chance of becoming a regional center in this area.”
The decree will ease out cryptocurrency profits and revenues from the regulatory and taxation glare for the next five years. Thus, this is definitely the best possible option for cryptocurrency entrepreneurs who wish to circumvent the shackles of legalisation. Anton Myakishev, the head of Microsoft’s offices in Belarus recently told Reuters that, “the decree is a breakthrough for Belarus” since it provides the industry with the “possibility to make a leap forward in its development,” while admitting foreign capital into entering the same under comfortable conditions.
Lukashenko revealed earlier this month that his main aim was to transform Belarus into a “tech nation” which served as the sole trigger behind his signing the decree. Apart from imparting a legal tag to ICOs and cryptocurrencies, this will also help IT companies in operating partly under English law. This will be of great help to foreign investors who are seen struggling to stay aloft given the stringent legal statures. Denis Alinikov, the senior partner at Aleinikov and Partners, a private law firm who had a considerable role to play in drafting the decree revealed that, “we regularly faced legal problems. When a Western company buys a Belarussian company they try to structure the deal outside Belarus. Investors don’t want to deal with Belarussian legislation.”
A legal link has been established by the decree in between token issuers and the obligations they have towards its holders. It sets capital requirement for protecting the cryptocurrency exchange operators against fraud while introducing smart contracts within the country. The IT sector of Belarus have been attracting foreign workers to work in its Hi-Tech park in plenty who charge about five times the average wage of the country. This thriving sector has an expected growth rate of 1.7% in the current fiscal as per Reuters. Popular messenger application Viber has also been developed in Belarus along with World of Tanks, an online gaming service which has helped its founder in becoming the first billionaire in Belarus. Vsevolod Yanchevsky, the head of the Hi-Tech Park revealed in a recent interview that, “the decree has been written exactly the way our tech community wanted it. Belarus will be one of the best jurisdictions in the world for cryptocurrencies and blockchain.”
Many feel that this move of Belarus has been influenced significantly by its neighbouring nation which has already drafted a law on ICO regulations and cryptocurrencies all set to enter the action arena within 28th December. This law will introduce limits on individual ICO investments and will consider cryptocurrencies as “other property.” Protection of retail investors will serve as one of the basic priorities of this bill which is going to be passed on March 2018. Vladimir Putin, the Russian president had set forward a timeline for bringing upon a regulatory architecture in regards to cryptocurrencies back in October. Russia is also set to launch its exclusive line of cryptocurrencies termed as Cryptoruble pretty soon.
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