Lukashenko authorizes crypto banks in Belarus
MINSK. Jan 16 (Interfax) - Belarusian President Alexander Lukashenko has signed a decree on crypto banks and regulation of digital tokens, his press office said.
"The document aims to strengthen the image of Belarus as a leader in financial IT technologies and provides for the creation of conditions for the operation of crypto banks in the country," it said.
The decree defines a crypto bank as a joint-stock company authorized to combine activities related to digital tokens with banking, payment and other related financial operations. To enter the market, a crypto bank needs to have resident status in the High-Tech Park and be included in the National Bank's register of crypto banks.
A crypto bank must comply with the legislation applicable to non-bank credit and financial organizations, as well as to follow the decisions of the supervisory board of the High-Tech Park.
"This dual regulation will allow crypto banks to offer clients innovative financial products that combine the advantages of traditional banking operations with the technological efficiency, speed, and convenience of digital token transactions," the press office said.
"This was one of the most eagerly awaited regulatory acts not only for the Belarusian fintech community but essentially for the global one as well, because this is a rather unique development for the global cryptocurrency market," National Bank First Deputy Governor Alexander Yegorov said, commenting on the decree. The National Bank's press office released footage of Yegorov making the comments.
He said a crypto bank would combine the functions of a traditional bank and those of a cryptocurrency exchange, with additional functions and additional opportunities for working with cryptocurrencies. A crypto bank will have a dual license. One license is from the supervisory board of the Hi-Tech Park, and the other from the National Bank.
"What does this give them? Firstly, a single balance sheet, meaning there will be no distinction between fiat money and crypto money within this institution. We will not treat cryptocurrency in a crypto bank as an isolated asset. It will be recognized as a legitimate currency, operable on the bank's balance sheet alongside traditional fiat money," Yegorov said.
"Citizens will be able to issue cards that will be linked exclusively to a crypto account and an enterprise will be able to hold funds in an account whose structure will be directly cryptocurrency," he said. The decree also stipulates that self-employed citizens will be able to receive their salaries in cryptocurrency, provided they receive it through a crypto bank," he said.
Accounting will be carried out according to the principles of bank accounting, according to the principles of the chart of accounts for banks. All transactions will be treated as standard banking operations.
Crypto banks will be subordinate to the National Bank. "The traditional supervisory approach will ensure the safety of funds, both fiat and crypto. The second important area is compliance with financial stability indicators and the stability of the institution itself. The National Bank will establish requirements that crypto banks will need to comply with," Yegorov said.
"We expect that the creation of such an institution will give impetus to foreign direct investment into our country. The decree provides for this in terms of forming the charter capital and guarantee fund of such organizations," he said.
The first crypto bank may appear in Belarus in six months. "We have set a period of six months to bring the legislation in line with this decree. And in parallel, we will certainly work with all potential investors, both domestic and foreign, so that almost immediately after the preparation of all legislation, we can see the first crypto banks in our country," Yegorov said.
"Various countries are showing interest in this. The idea of establishing crypto banks didn't come from nowhere - initially, there was investor interest, and then the idea progressed to a draft regulatory act supported by the head of state," he said.
Lukashenko said in September last year that he backed the creation of crypto banks in the country. External payments through Belarusian crypto exchanges could reach $3 billion in 2025, he said at the time.
Cryptocurrency could become an alternative to the U.S. dollar, and mining it in Belarus will increase the country's electricity consumption, Lukashenko said in November. "Currently, our whole world is sick with a global problem: weaning itself from one currency, the dollar. And this process will be growing. And cryptocurrency is, probably, one of options for abandoning [the dollar]," Lukashenko said.
He said new regulations must allow bona fide commercial entities from Belarus and foreign investors to "continue working calmly in our digital haven".
At present the creation, emission, sales, and purchases of tokens are largely regulated by the Hi-Tech Park within the framework of Ordinance No. 8 adopted in 2017. The document provides for the liberalization of conditions for doing business in the field of information technology and the digital economy in Belarus. The document created a favorable environment for the Hi-Tech Park, legalized smart contracts, and also granted the right to individuals to carry out transactions with tokens (mining, ownership, exchange, gifting and bequeathing).
