Officials in Belarus have no plans to tighten the country's regulatory framework for the cryptocurrency industry, according to a statement. This comes as Russia, which is a close economic ally, is mulling over a proposal to impose tough restrictions on a range of crypto-related operations, including mining, trading and investing. "There are currently no restrictive changes to the existing regulatory model," Belarus Hi-Tech Park (HTP) told BNN Bloomberg. HTP, often referred to as "Belarusian Silicon Valley", operates a special legal regime established to facilitate the development of the country's IT industry, including the cryptocurrency business. Minsk legalized crypto activities such as mining and trading with a decree signed by President Alexander Lukashenko that went into effect in March 2018. It introduced tax breaks and other incentives for companies working with digital assets. In April 2019, the Belarusian leader suggested that bitcoin farms could be built at the Grodno nuclear power plant and in August last year he urged Belarusians to stay in their home country and start mining cryptocurrencies. This is despite the fact that he hinted at a possible tightening of regulations in March.
The use of cryptocurrency for payments is prohibited in Belarus, but entities registered as residents of the Hi-Tech Park can issue and exchange coins and tokens. In November 2020, the country's largest banking institution, Belarusbank, launched a service that allows users to buy and sell digital currencies. The cryptocurrency adoption index of the blockchain forensic company Chainalysis places Belarus in third place in Eastern Europe, after Russia and Ukraine, largely due to the strong peer-to-peer activity in the country. Belarusians are not obliged to report their crypto transactions to the tax authorities. Belarus maintains close economic, political and military ties with the Russian Federation, whose central bank proposed last week to ban the use, issuance and exchange of cryptocurrencies. However, the regulator's hard line was rejected by representatives of other government institutions.