Belarus President Advocates Expanded Cryptocurrency Use as Sanctions Pressure Mounts
Facing significant economic challenges from international sanctions, Belarusian President Alexander Lukashenko has called on the nation’s banking sector to increase the use of cryptocurrencies and digital payment systems. Speaking to leaders of the central and commercial banks, Lukashenko emphasized that digital tokens could help alleviate the strain caused by shrinking exports and restricted access to global financial networks.
Crypto Transactions Surge Amid Sanctions
According to the state-owned Belarusian Telegraph Agency, Lukashenko noted that cryptocurrency-based transactions have become increasingly vital, with $1.7 billion processed via Belarusian crypto exchanges in the first seven months of 2023. Expert estimates suggest this figure could nearly double to $3 billion by the end of the year. Major exchanges operating in Belarus, including Binance, OKX, and KuCoin, are reportedly on track to expand external payment volumes significantly.
Belarus currently has an estimated 855,000 crypto users, projected to rise to nearly 10% of the population by 2026, according to data from Statista. This growing adoption reflects a strategic pivot to digital assets amid persistent economic sanctions imposed by the European Union and the United States due to Belarus’s support of Russia’s invasion of Ukraine.
Push for Digital Payment Infrastructure and Technological Innovation
Beyond cryptocurrency, Lukashenko instructed banking officials to expedite the rollout of digital payment capabilities, starting with QR code payments and aiming to implement an instant payment system before year-end. VTB Bank Belarus, majority-owned by the Russian government, has already introduced QR code payment options linked to the national online payment system ERIP.
In addition, the president underscored the necessity of adopting biometric technologies and artificial intelligence to modernize banking services and reduce dependence on foreign IT providers. “Digitalization is not an end in itself; it must deliver tangible economic results,” he stated.
Belarus’s Ambivalent Crypto Regulatory Landscape
Belarus’s approach to cryptocurrency has fluctuated over recent years. In 2018, the country legalized crypto activities including mining, selling, and exchanging digital assets. However, regulatory measures have also tightened, such as the 2022 law prohibiting individuals from trading cryptocurrencies outside Belarusian exchanges and proposed bans on peer-to-peer transactions.
Earlier in 2023, Lukashenko directed efforts to develop the domestic crypto mining sector, leveraging Belarus’s surplus electricity. These mixed policies reflect a balancing act between fostering innovation and maintaining regulatory control amid geopolitical and economic pressures.
FinOracleAI — Market View
Belarus’s strategic push to expand cryptocurrency use and digital payment infrastructure is a direct response to the economic constraints imposed by Western sanctions. By encouraging banks to leverage crypto for external payments, the government aims to circumvent traditional financial barriers and sustain trade flows. However, risks remain related to regulatory uncertainty and potential further sanctions targeting digital asset channels. Market participants should monitor developments in Belarus’s crypto regulatory framework and the effectiveness of these measures in mitigating economic pressures.
Impact: positive
