Belarus has given the nod to transactions in crypto currencies. The move is a part of liberalization of the Soviet-style economy of Belarus, attract foreign investment and foster private sector growth.
The announcement has come at a time when the state is weighed down by bureaucracy and inefficient state-owned enterprises. The economy of Belarus is, to a great extent, is dependent on Russian money and subsidies.
Belarus President Alexander Lukashenko signed a decree to allow the use of Bitcoins on December 21. Earlier in the month, the President had said, “All smart and intelligent people know what stability and order are. They’re all trying to reach that shore. We’re prepared to arrange a dock and even a harbor.”
President Lukashenko, who once called the internet “garbage”, has made attempts to revive business environ and shore up the economy after it was hit by recession in 2015 and 2016.
Bitcoin has lost nearly a third of its value since reaching a record high of more than $19,000. According to the latest information available on coinmarketcap website, the largest crypto currency by market cap is trading at $16655.70. In the last 24 hours of trading, Bitcoin has seen a positive change of 7.88 percent in value.
In past few years, Belarus has come up with some globally recognized IT brands, which are doing Belarus a world of good, which is seen as a country stuck in a Soviet time warp. The success of IT industry in Belarus is not matched by other sectors, which remains cramped by public sector enterprises that have seen little or no reform since the collapse of the Soviet Union.
The decree is expected to grab the attention of digital coin entrepreneurs, who are moving from locations where regulators have come hard to intensify scrutiny. The order authorizes initial coin offerings (ICOs) and transactions in crypto-currencies. The cryptos can also be used as an alternative to traditional currencies on Belarussian exchanges. Besides, all trades in cryptos will be tax-free for the next five years.
The economy is estimated to grow at 1.7 percent this year. As per the International Monetary Fund, the economic growth will remain around 2 percent annually over the next few years given the state-run heavy industries don’t make changes.