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The second Japan? Belarus's new law legalizes encrypted currency transactions



A bill on high tech parks is awaiting signature by the president of Belarus, a bill that aims to legalize cryptocurrencies. Once the act goes into effect, the circulation of cryptocurrencies and ICO tokens is legal. In addition, exchanges are also able to encrypt their currency in ruble transactions, ICOs can be used for fundraising, and mining will also become an activity permitted by Belarusian law.

Legalize cryptocurrencies


Belarus is a landlocked country in Eastern Europe, located between Poland and Russia. The domestic population is about 9.5 million.

In 2005, Belarusian President Alexander Lukashenko signed a decree calling for the creation of an exclusively IT-based economic zone similar to Silicon Valley in the United States. Known as High Technology Park (HTP), this particular area is the only area in the country that enjoys preferential tax policies. For example, HTP residents do not pay income tax, value added tax, land tax and property tax.

This summer, the government began drafting a bill to encourage foreign investment into the region while incorporating new technologies and innovations. And this draft is the HTP draft currently waiting for the President to sign, including the legal provisions on cryptocurrencies and ICO.
According to local media reports:

This draft allows blockchain-based encryption of cryptocurrencies and tokens in private circulation. The government has enacted this comprehensive rule of law to facilitate HTP residents in providing cryptocurrency exchange services, trading cryptocurrencies and attracting ICO funding, while allowing for the public circulation of cryptocurrencies and tokens.
According to reports, the draft not only provided legal status for cryptocurrencies, but miners' activities were also recognized. The draft stipulates that it is legal to set up a large cryptocurrency mining center in Belarus. With abundant electricity resources in the country and low electricity costs, experts believe the cryptocurrency mining industry will create additional demand for electricity across the country.

Sergey Lazyuk, Head of Digital Banking at Priorbank, the largest private bank in Belarus, said this week:

Belarus will create a system that is devoted exclusively to physical and cryptocurrencies, and in fact, such exchanges will be legal. (After the Act enters into force) Belarus will take a leading position in the development of cryptocurrencies.
Igor Mamonenko, CEO of Belarusian IT giant Belhard Group, also commented on the legalization of cryptocurrencies:

Legalization is necessary ... Although the existing laws do not prohibit such activities directly, it is a must to change the laws in order to protect all the participants.



Legitimate crypto currency exchange


In the meantime, Belarus plans to open its first centralized cryptocurrency exchange. The exchange, initially scheduled for spring next year, will be "the first (legalized) cryptocurrency exchange in the Customs Union (Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan)". The exchange, named exrate.by, mentions on its website:

As the first centralized cryptocurrency exchange, we are able to make legal input and output of legal tender money ... In addition to the standard trading operations, the exchange will add the Belarussian trading function.
This HTP bill will amend the law.
Lazyuk stressed that while this issue is still under consideration, it will be legal in Belarus to encrypt currency exchanges:

All citizens can trade cryptocurrencies with the Belarussian ruble, not just the U.S. dollar or the euro.