Key Highlights
- Belarus blocked access to major foreign crypto exchanges, including ByBit and OKX.
- The ban centralizes trading on domestic platforms to combat illegal financial activities.
- Observers are watching to see if Russia may implement similar regulations.
The Belarusian government, using a pre-existing decree signed by President Alexander Lukashenko, limited access for citizens to key foreign-based cryptocurrency exchange platforms on December 10.
The measure, aimed at improving security for consumers and mitigating outflows of funds used for illicit purposes, was introduced when the domain names of exchange platforms such as Bitget, ByBit, and OKX were blocked on a list of restricted access resources. This marks a major move by Belarus to encourage all trades in cryptocurrencies to take place on local exchange platforms.
Implementation of the ban
From 10 December, users in Belarus have been prohibited from accessing international crypto exchanges Bitget, ByBit, and OKX. This was as a result of their inclusion in a list of restricted access resources, which are managed by the Republican Unitary Enterprise for Electrosym Communication Supervision, which is popularly known as “BelGIE.”
The Ministry of Information issued the order, which immediately affected users, with many users of ByBit in Belarus complaining of access difficulties. Users of the blocked websites attempting to access them using the “Beltelecom” government-owned provider received a message showing that access to the “information resource” was restricted due to a decision by the “authorized body of the Republic of Belarus.”
Earlier, on December 5, access to the Smart Mining bot website was also restricted as a result of a representation submitted by the Investigative Committee of the Republic of Belarus. However, some users have already found ways to bypass the restrictions.
The new laws are a result of an order signed by President Alexander Lukashenko, which prohibits individuals from transacting using foreign exchange sites. This means that all transactions related to digital currencies are supposed to take place on local exchange sites. This law affects not only local citizens but also those in High Technology Parks, which are involved in IT development.
The Belarusian government reported that “together with increasing consumer protection, it aims to protect the country from using cryptocurrencies for unlawful activities.” Moreover, it aims to protect Belarusian funds, especially those of a criminal nature, from being laundered through cryptocurrencies and transferred abroad on international cryptocurrency exchanges.
While the country did not ban using foreign exchanges, it restricted the current Belarusian ones to HTP residents, effectively banning peer-to-peer Bitcoin transactions in the country.
Limited immediate impact and regional implications
Although this decree clearly shows that the government has a determined policy of promoting a controlled, localized market of cryptocurrencies, it seems that this move will not make a huge impact on the current situation. This is due to the reason that most of the legitimate activities of cryptocurrencies in Belarus are already taking place in a controlled manner through HTP.
The Belarus situation remains closely watched by its closest ally, which is Russia, as Belarus has been a testing ground for various policies of Moscow, especially economic ones. If Russia were to do likewise, it would prove to be a major development in its larger market.
But it appears that Moscow has been warming up to cryptocurrencies, as evidenced by the testing of their own crypto exchanges. There are mixed feelings among experts as to whether a similar policy would be implemented in Russia.
According to Mikhail Uspensky, a member of the Expert Council for Legislative Regulation, “a ban on acquiring foreign digital assets would be a suicidal step for foreign economic actions of Russia, taking into consideration the current geopolitical situation.”
This opinion appears complicated by the attitude of the Russian Central Bank, which expresses its worries that “an unrestrained rise of digital money might destabilize the already overburdened Ruble, which negatively affects the use of national currencies.”
Tighter regulatory grip
The limitation of access to major international crypto exchange platforms represents a major step in the escalation of Belarus’s regulatory grip on its digital currency markets.
Through this move, the government seeks to localize all transactions in cryptocurrencies in a closely monitored environment. While people continue to look for means of acquiring access around this restriction, it becomes clear that this move by the government tightens its grip on cryptocurrencies.
Also Read: Belarus Eyes Crypto Mining as Part of Future Growth Plan
