Belarus, infamous for being Europe’s last remaining dictatorship, has moved to implement further restrictions on crypto trading. In a post on the social media app Telegram on Sunday, the Belarusian government announced plans to ban cryptocurrency transactions between individuals, citing fears over criminal fraud.
However, for “transparency and control,” citizens will have permission to conduct transactions through exchanges in the Belarus Hi-Tech Park (HTP). The park itself is located in the northeastern part of Minsk, the Belarusian capital.
Draconian Restrictions on Digital Currency
The HTP also works under the principle of extraterritoriality, where countries can extend their jurisdiction beyond their physical borders. Therefore, a company can be registered in any region of the country and at the same time fall under the jurisdiction of the HTP. Foreign companies can also register to operate in the HTP with a limited physical presence.
The statement went on:
“Implementing a practice similar to the procedure for exchanging foreign currencies will make it impossible to withdraw money obtained through criminal means. Under such conditions, it will simply become unprofitable for IT fraudsters to operate in Belarus.”
Belarus has regulated cryptocurrencies since 2017. Currently, the country only has one locally registered crypto exchange, called Currency.com.
The new law will be the latest in a long line of measures to restrict economic freedom. Belarus is the least economically free country in Europe, according to the Heritage Foundation, ranking 145 out of 176 countries globally. Freedom House gives Belarus 8 points out of 10 for freedom overall.
The Eastern European country is one of the few to have actively “turned off” the internet after widespread 2020 protests following a rigged election.
Belarus Ranks 25th on Crypto Adoption Index
The usage of cryptocurrency has increased in recent years following the post-election crackdown. Dissidents and protestors turned to cryptocurrencies and VPNs to skirt repression and financial monitoring. In the latest Crypto Adoption Index by Chainalysis, Belarus ranked relatively high, at 25.
This year, the longstanding autocratic President, Alexander Lukashenko, said the country should look to China for guidelines on controlling the digital economy. The new special governmental body would look to formalize regulations around the technology, according to news agency Belta.
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