On March 28th, a presidential decree came into effect in Belarus that made crypto and blockchain activity completely legal in a bid to boost the country’s economy. Since then, the country has gone from strength to strength and is now hosting its very first Blockchain and Bitcoin Conference.
The decree essentially made all aspects of the blockchain and crypto industry legal, while rolling out enticing benefits for companies and individuals operating in the space. As long as companies and individuals register as a resident of the Belarus High Technologies Park (HTP), all crypto activities in the country are legal.
Quickly Growing in Numbers
Since the decree came into effect, more than 380 firms have signed up to be residents in the Belarus High Technologies Park and more than half of these are considered permanent residents. This shows the increasing demand from blockchain and crypto firms looking for a base to call home in Europe. However, the country will face stiff competition from Malta, as it recently pushed its crypto-friendly laws live.
Making Crypto Taxes Clear
In most jurisdictions, taxes on crypto activity are as clear as mud. It’s a legal and political minefield, with different countries taking very different stances on how it works. Belarus has a plan of its own – make crypto activity tax free. Okay, while it’s not all tax free, anyone profiting from mining, the issuance and placement of digital currencies, as well as from trading, won’t have to pay any taxes until January 1st 2023.
By making crypto tax laws clear like this, more firms will be willing to operate in the country as they know exactly how much tax they will be required to pay from the outset – no need for apps like ZenLedger for the time being in Belarus then.
A Potential Legal Headache Later Down the Line
While having hundreds of firms registering and operating in the country seems like a good thing, it’s largely unregulated. This means that the HTP is quickly being filled up with a number of crypto scams looking for a European base that’s easy to get into. There is no regulation in the country, only the one rule. This could make the regulation process later on a potential headache, as many firms will be to be kicked out and new firms might look unfavorably on this. In addition to getting a bad reputation with firms, other jurisdictions might not recognize a license from Belarus in the future due to the bad reputation the HTP has earned over the years.
Belarus is certainly making important steps towards becoming a crypto capital within Europe, but it has a long way to go. It’s positive to see that the number of registered firms in the HTP is growing, but next we need to see some solid regulation coming from the country – otherwise the country could become a regulatory mess later on.