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Belarus to regulate blockchain and cryptocurrencies

The National Bank of Belarus has announced the creation of an information network using blockchain technology. The system is intended for banks who will be able to organize services and have an expanded range of operations. Cryptocurrencies are not going to arrive in Belarus, but the country does not have formal restrictions against such operations.

Why Belarus needs blockchain

Thanks to the equal conditions of all participants, it means 100% fairness of transactions and protection of operations. It is believed that it is impossible to forge the information protected through blockchain at the current stage of technology development. 

This means that the system can be entrusted with carrying out the most responsible, expensive and complex operations in banking, insurance, transport and other spheres. 

First blockchain scenario in Belarus: bank guarantees

The introduction of a new technology for transferring information using the network of blockchain allows significantly expanding the range of information provided in the register of bank guarantees (a written promise of a bank to pay to other bank or company in case obligations are not fulfilled), says the National Bank of Belarus.

For the emergence of crypto-currencies, Belarus needs a legal framework, which is currently not in place.

Thus, not only information on the issued guarantee can be transferred to the register, but also the guarantee itself, if it is provided for by legislative acts or if the participants of guarantee relations agreed to place guarantees in the register.

At present, to ensure the participation of economic entities of the Republic of Belarus in the procurement procedures for goods (works, services) of the Eurasian Economic Union countries, the Belarus National Bank has initiated the introduction of amendments to the Treaty on the Eurasian Economic Union. They will concern recognition of bank guarantees issued by resident banks of one member state as a security guaranteeing participation in public procurement conducted by customers of other member states.

Where else is blockchain useful?

Blockchain will be useful in any project that requires storage and protection of a large amount of data, as well as guarantees for the execution of scenarios. For example, the technology ensures the implementation of "smart" contracts: payment for the delivery of goods will occur automatically, as soon as the cargo arrives at its destination. The probability of a dishonest transaction is excluded, there is no human factor.

The downside

Blockchain uses smart contracts, which work only for a given set of conditions, which are in its database. They do not know how to analyze changes in the external environment.

The system cannot foresee how exactly the outside world will change. If the conditions that were not provided initially are not laid down in its database, smart contracts will not be able to "adjust" to them.

Will crypto-currencies come to Belarus?

The National Bank has exluded the possibility of using cryptocurrencies for settlements in Belarus in the nearest future. The emergence of crypto-currencies requires a legal framework, which Belarus does not have. In other words, laws that would regulate operations with crypto-currencies are not yet in place.

SEE: Are cryptocurrencies allowed in Belarus?

National Bank: "Currently, there is legal uncertainty about the status of crypto-currencies in the Republic of Belarus. In accordance with the legislation of the Republic of Belarus, crypto-currencies are not works, services, objects of intellectual property, property rights, electronic money, foreign currency, cash or securities. Regulation of turnover of crypto-currency is not within the competence of either the National Bank or other state bodies of the Republic of Belarus.

At the same time, it is obvious for the National Bank that when new relations arise with the use of crypto currency, there will be a need to create certain rules that will prevent or minimize various kinds of abuse and will contribute to the harmonious development of the innovation.

The Bank believes that in order to eliminate possible contradictions and gaps in the legislation, it is necessary to conduct a phased, full-fledged regulation of the turnover of crypto-currencies by adopting normative legal acts of the appropriate level. Belarus will most likely define a separate crypto-currency regime that will take into account all the legal and technical features of this innovation."

Belarus to regulate blockchain and cryptocurrencies