Belarus has legalized the cryptocurrency industry. President Alexandar Lukashenko has signed a decree that will make all the cryptocurrency transactions tax-free for the next five years. Belarus will become a tempting location to mine and control cryptocurrencies with these latest provisions.
President Lukashenko explained that the new decree will develop an IT friendly environment in Belarus. His explains, "The main goal of the document is to create such conditions that global IT companies would come to Belarus, open their offices, development centers, and create popular products in the world.”
Grow the private sector
Belarus aims to foster the private sector growth by legalizing the cryptocurrency industry. Belarus also hopes to attract foreign investment, due to its stance on ICOs and cryptocurrency exchanges. This decree will free Belarus from Soviet-style economy.
The decree does not enforce any control for the creation, issue, storage, or transfer of cryptocurrencies. It does not control the operations of the cryptocurrency exchanges and companies. Income tax does not apply on the earnings from mining and trading of cryptocurrencies. These provisions will remain applicable till 2023.
To protect the participants of ICOs from fraud, each legal entity that issues digital tokens will have to meet the standard demands, which are agreed upon during its creation and issue. The claims of token holders cannot be denied by ICOs on the basis of lack of legal grounds for function. This will protect the investors from fraudulent ICOs.
With this decree, Belarus has become one of the first countries to legalize smart contracts. Denis Aleinikov, the senior partner at Aleinikov and Partners, is the main writer of the decree. He comments, "Smart contracts may solve the core problem of all humans, which is a failure to manage what has been agreed on paper. A computer program takes the function of a contract's automatic carrying out.”
The government of Belarus has dedicated the Belarus Hi-Tech Park (HTP) as the main location for the pilot program of digital tokens. HTP was created in 2005 and has risen to be one of the leading IT-clusters in Eastern Europe. The HTP provides a number of perks to its employees. The companies in HTP are exempted from all forms of corporate taxes. Moreover, the employees working in HTP pay a 9% income tax, instead of the usual 13%.
Belarus’ decision to legalize cryptocurrency will be widely hailed by the cryptocurrency market. Will cryptocurrency-related agencies move to Belarus to take advantage of its friendly laws? Only time will tell.