Belarus is setting the legislative wheels in motion to prohibit peer-to-peer (P2P) crypto transactions, a move aimed at curbing criminal operations within its borders. The Ministry of Internal Affairs of Belarus revealed this plan via the Russian social platform, VKontakte.
The Ministry stated that since the start of the year, their cybercrime units have successfully disrupted the activities of 27 citizens offering illegal cryptocurrency exchange services. These operations generated an illicit income of nearly 22 million rubles, equivalent to $8 million.
The proposed legislation aims to prevent the withdrawal of criminally acquired funds, thereby making such fraudulent operations financially unviable within the country. However, P2P transactions will still be permitted through crypto exchanges registered with Belarus Hi-Tech Park (HTP), a special economic zone created to foster tech businesses.
Belarus has been a pioneer in crypto adoption. The country legalized cryptocurrencies, ICOs, and smart contracts in 2018 provided the companies were registered with the HTP. President Alexander Lukashenko, in 2018, declared that “Belarus will become the first government in the world that opens wide opportunities for the use of blockchain technology.”
Businesses registered with HTP enjoyed tax-free status and no restrictions until 2023, allowing companies to mine, create, and acquire crypto tokens without declaration. In 2021, Lukashenko urged the government to mine crypto with surplus power. In February last year, he signed a decree supporting the free circulation of crypto, providing legal protection for crypto investors from losses and enabling HTP to register addresses associated with criminal activity.
However, this new draft legislation could place significant constraints on cryptocurrency trade. Enforcing a ban on P2P transactions raises numerous questions, especially considering the struggles other countries like China have experienced in enforcing similar bans back in 2021. It’s also worth noting that banning P2P transactions contradicts Bitcoin’s original use case as outlined by its creator, Satoshi Nakamoto.
The effectiveness of the Ministry of Internal Affairs’ proposed ban and its potential to become law remains uncertain. As the world watches, the question arises: Is this a step back for a country once at the forefront of crypto adoption, or a necessary measure to ensure the security and legality of crypto operations within its borders? Only time will tell.