Belarus recognized cryptocurrency. What's next?

A few days ago on Geektimes it was already reported that Belarus became the first country in the world that legalized smart contracts and canceled income income for miners. Rumors about a big project regarding cryptocurrency, which is being prepared in the highest echelons of power, went for almost a year. And, as it turned out, the reality even exceeds expectations - everything that participants in the cryptocurrency market of Belarus only dreamed about has happened.



Alexander Lukashenko, the country's president, signed Decree No. 8 “On the Development of the Digital Economy”. According to this document, the industry is exempt from income tax and VAT until January 1, 2023, plus such concepts as mining, blockchain, smart contract, token and others are officially introduced in the country. From now on, transactions with tokens are not entrepreneurial activities, therefore, you do not need to pay taxes. The decree comes into force after three months.



Individuals are allowed to own tokens, mine them, store, exchange, buy, alienate for Belarusian rubles, foreign currency and electronic money. Moreover, tokens can be given and bequeath. According to those involved in the development of the document (and consulting and law firms of Minsk and a group of professionals from the blockchain industry worked on it), the main goal is to create conditions under which global IT companies came would be in the country, opened their offices, development centers, as well as create a product in demand worldwide.



In addition, additional objectives are named - these are investments in the future of the country (first of all, training of IT specialists) and introduction of modern financial instruments and technologies.



Lukashenko said that he hopes that the legalization of cryptocurrency will help Belarus to become, if not global, then the regional center of competence in the named area. And this means that “technologies, capital and, most importantly, intelligent and talented people from all over the world” will be attracted to the country.



The document also expanded the activities of residents of the High-Tech Park. In the list of new activities, for example, were:

• provision of services related to the creation and placement of digital marks (tokens), including promotion services and other related services;
• cryptocurrency exchange activities;
• the activity of the cryptocurrency exchange operator;
• mining;
• other activities with the use of tokens, including those containing signs of professional and exchange activities in securities, investment fund activities, securitization, as well as operations for the creation and placement of own tokens;
• activities in the field of eSports, including the preparation of teams, the organization of competitions, their broadcasts;
• creation, training of neural networks and other algorithms in specialized sections of artificial intelligence.

Be that as it may, Belarus is now clearly ahead of the rest of the planet with respect to cryptocurrency. Probably many companies that are associated with the crypt and mining, are already thinking about moving to this country. By the way, electricity is inexpensive here, especially compared to countries in Europe and the USA. Perhaps it will be even cheaper due to the early introduction of the plant. Its first unit will be launched in 2019.



The adoption of cryptocurrencies at the legislative level in Belarus will have consequences for neighboring states. Thus, the chief economist of the BCS, Vladimir Tikhomirov, believes that now the decision regarding work with cryptocurrencies in the Russian Federation will be postponed. So far, however, the deadlines for establishing Russian regulation have not changed. According to the public ombudsman for digital policy, Ilia Dimitrov, the Russian government, in parallel with the Belarusian decree, is also considering world experience. So, special attention is paid to Japan. Studied and "regulatory sandbox" of Switzerland. These are specialized legislative tools that allow, after each stage of the introduction of cryptocurrency, to test the effect of this stage under experimental conditions.



In Russia, the norms of legislative regulation of cryptocurrency and blockchain will be ready by July 2018. This work is done by the government and the Central Bank on the instructions of President Vladimir Putin. Officials need to describe in the legislation the status of cryptocurrency, the technology of distributed registries (blockchain), and also do the same for the token and the smart contract. By the same date, the Central Bank and the government are planning to work out mining requirements, with the obligation to register miners. Most likely, tax will be offered.



It may well be that Belarus, knowing about the relatively harsh measures of its neighbor to cryptocurrency, decided to adopt liberal legislation so that the miners gradually move from the Russian Federation to a new country.



And if we take into account the fact that European governments insist on regulating Bitcoin, considering that cryptocurrency is a great way to launder money, Belarus has completely guessed with the time it takes to make a decision on legalizing a crypt. Europe’s attitude to Bitcoin and other cryptocurrencies was well described by the Chairman of the Bank of France, Francois Villerois de Galo: “Let's speak frankly: Bitcoin cannot be considered currency or even cryptocurrency. This is a speculative asset. Its cost and extreme volatility are not economically justified, and no one is responsible for them. ”







The UK also supports tougher cryptocurrency measures. In July 2014, the ECB recommended that European banks not conduct operations using any type of cryptocurrency until a regulatory regime is established by law.



Experts believe that the decision taken by the Belarusian authorities will generally have a positive impact on the cryptosphere, but the effect of its adoption will not be too significant on a global scale. Ilias Konstantinidis, business analyst at Prex & Securitas, gave a few comments on the effect that the document signed by Alexander Lukashenko can produce.



Will this change the ICO market?



In the short and even medium term - no. Some of the projects will “move” to the Republic of Belarus, but I wouldn’t talk about some momentous turn in the development of crypto projects. The problem is that the trust of people in general, and in particular crypto-entuzastes, to state institutions is rather low.



Should companies planning to place tokens urgently come under the jurisdiction of Minsk?



Such companies urgently need to do strategic planning and fundamental analysis of their business model, risk assessment and analysis of the legal field in which they are going to operate and operate. As practice shows, the vast majority of projects do not have a clear development plan, including a business development strategy. The choice of jurisdiction is fundamentally important for cryptostartage and depends on a large number of factors. Now I would not begin to transfer my own projects to Belarus, while the work of the cryptosphere there is still not legally and bureaucraticly settled.



Considers / has your ICO considered a transition under Belarusian jurisdiction?



Definitely not. We have done a great job in terms of risk analysis and the choice of jurisdiction appropriate for our business. At this stage it is impossible to “lure” us into alternative jurisdiction only because there are some preferences for the cryptosphere. Choosing, and especially moving to another jurisdiction - an action that will have a very strong influence on any startup. Everything must be justified, thoughtful and calculated many times.