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6.49 Rather Enabling Environment
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The Belarusian IT sphere started to demonstrate significant success, including in the global market, in 2016-2017. Belarus became famous in the world as the "Silicon Valley of Eastern Europe". In 2016-2017, Reuters, Euronews, Wall Street Journal, The Financial Times wrote about the achievements of such global IT projects as EPAM, Viber, MSQRD and Wargaming, all having their roots in Belarus.
The interest in Belarus as a country favorable for conducting cryptocurrency-related business emerged at the end of 2017, after the President of the Republic of Belarus signed Decree No. 8 "On the Development of the Digital Economy" in 2017, which officially legalized the operation of crypto exchanges, crypto wallets, mining and other activities involving the blockchain technology. Many provisions of the Decree were unique in the global practice, for example, Belarus became the first country in the world to legalize smart contracts. At the same time, conducting a crypto business was allowed only to the residents of the Hi Tech Park (a "regulatory sandbox" for IT companies with preferential tax treatment).
The National Bank of the Republic of Belarus has a great interest to blockchain technology and tries to implement it in its activity. In October 2016, the National Bank announced the launch of two projects involving the blockchain technology. It was about the development of a ledger of bank guarantees and the securities transactions ledger.
Rather Enabling Political Environment
In general, the attitude of the state agencies to the blockchain and cryptocurrencies is positive. Blockchain and cryptocurrencies are of great importance for the government of Belarus. The state agencies are ready to provide state support to the IT industry in general and specifically to the crypto industry. The President set the goal to make Belarus an IT country. The Government of the Republic of Belarus pins huge hopes on new technologies as an insurance of the development of the country's economy.
The National Bank of the Republic of Belarus shows the most critical position regarding cryptocurrencies, although it uses the benefits of the blockchain technology. Due to the risks associated with cryptocurrencies, Belarus is cautiously introducing technology into the economy: cryptocurrency-related business is only available to residents of the special "regulatory sandbox" – the Hi Tech Park.
Rather not Enabling Legal Environment
Regulatory Convergence In Belarus, there is a comprehensive special legislation regulating cryptocurrencies and blockchain: Decree No. 8 On the Development of the Digital Economy. The relations involving cryptocurrencies and blockchain are not referred to the capacity of one agency. The President, the Ministry of Finance, and the National Bank play an active role in regulation of such relations. The government of Belarus has created a special intergovernmental body - Council for the Development of the Digital Economy - that will coordinate the activities aimed at implementation of the state policy in the field of digital transformation of the economy. The legal determinations of the agencies are coordinated, there are no contradictions.
Definiteness of Legal Regulation In Belarus, there is a comprehensive special legislation regulating cryptocurrencies and blockchain: Decree No. 8 On the Development of the Digital Economy. It regulates the common aspects of operations with cryptocurrencies and taxation. The operations with cryptocurrencies are only allowed for the residents of the Hi Tech Park.
To the extent, to which the Decree does not regulate legal relations, the state agencies adopted correspondent clarifying instructions and resolutions (the AML/CFT rules for banks, the rules of accounting of tokens). But still there are some issues in the legislation in the form of special AML/CFT rules for crypto companies, in particular, the legislation does not determine the AML/CFT rules for exchanges and exchangers.
Stability of Legal Regulation When the Decree was signed, it became evident that the AML/CFT legislation requires amendments and additions with respect to the determination of approaches to the control of operations with tokens. At the present time, the Belarusian government in cooperation with the Hi Tech Park develops standards for the operation of crypto trade exchanges and exchangers and is waiting for the instructions from FATF/ More detailed rules of ICO conduct that, as the rumors say, may limit participation of investors in ICOs are being developed.
Nevertheless, there are no grounds to believe that the government will change its course towards active support of the IT sphere, the blockchain technology and cryptocurrencies.
Adequacy of Legal Regulation In general, quite adequate and progressive (and complex, which is of high importance) legislation regarding cryptocurrencies and the blockchain has been adopted in Belarus. However, the decree is still not fully working (no exchange or exchanger was registered, no ICOs have been conducted), although it entered into force more than six months ago. Thus we can fully discuss the adequacy of the legal regulation only after the Decree starts to be used in practice.
Situation with the Rule of Law Belarus has low indicators of the rule of law, ranking 65th in the world among 113 countries. The conditions of the legal regulation of blockchain and cryptocurrencies are enabling, and since the values of the sub-criterion of the rule of law are low (0.51), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are significant.
Enabling Infrastructure Environment
There is a quite highly developed E-Government, telecommunications, and online services infrastructure in Belarus. Belarus ranks 38th among 193 countries in the UN Global E-Government Development Index.
Belarus also has relatively high business environment development indicators, ranking 38th in the world.