On December 21, President of Belarus Alexander Lukashenko signed the decree on “Development of digital economy”, which creates a legal framework for Initial Coin Offerings (ICOs), cryptocurrency and the introduction of smart contracts.
Russia's western neighbor, Belarus, has officially recognized bitcoin, cryptocurrencies, their mining and ICOs, becoming one of the first countries in Europe to do so, in a move that’s set to drive private sector growth and attract foreign investors to the country.
The former communist republic, squeezed between Russia and the European Union, is still dominated by the state, weighed down by bureaucracy and inefficient state-owned enterprises, and dependent on Russian money and subsidies.
The decree notably gives cryptocurrency enthusiasts tax breaks and legal incentives, as its goal is to help turn Belarus into an international tech haven, Bloomberg reports.
The decree was signed by the Belarusian President Aleksandr Lukashenko last Friday and comes into force in three months.
“Belarus is now the world’s first jurisdiction with a complex legal framework for regulating blockchain-based businesses. The decree provides for no restrictions and special requirements to creating, placing, storing, expropriating or exchanging tokens and to the activity of crypto platform and cryptocurrency exchange operators.”
Designed to attract cryptocurrency entrepreneurs looking to avoid regulatory scrutiny over cryptocurrency transactions and ICOs, the decree also exempts revenue and profits from all operations using cryptocurrencies for the next five years.
The law states: "Turnovers, profits (income, proceeds) from various operations with tokens are not recognized as taxable items until January 2023."
Bitcoin is now a Legal Currency in Belarus
Now, the people of Belarus can list and promote ICOs, create and sell cryptocurrencies, establish cryptocurrency exchanges and do other operations with digital money.
Bitcoin and other virtual cash can now be given as a gift and inherited in Belarus. All operations with cryptocurrencies are not considered a business activity.
For now, there are no tax plans in Belarus. Do keep in mind this is only for the next five years. Afterward, this topic will be revisited to see if changes need to be made. Legalizing cryptocurrencies, ICOs, and even smart contracts is a big decision. Initial coin offering projects will be very happy about this decision as well. Most countries try to oppose this business model, for obvious reasons.
Governments should educate people about the risks associated with cryptocurrencies and learn more about the blockchain technology before attempting to regulate its currency by-products.
Belarus has, once again, created a surprising precedent in this regard.