After a complete ban on cryptocurrencies in China, other countries began to block the mining of coins: Kosovo, Iran, Abkhazia. Iceland, Sweden, and Kazakhstan have introduced restrictions on mining. In Russia and the United States, the “production of digital assets” is still under question. Politicians of the states believe that it is necessary to ban the circulation of cryptocurrencies and introduce a fine for their mining. Against this background, Belarus remains a “green zone”. The country has created comfortable conditions for mining virtual currencies: reduced electricity tariffs, developed infrastructure, and no taxation until 2023.
Mining in Belarus was legalized in 2018, after the entry into force of Decree No. 8. Thanks to this document, the country was the first in the world to introduce comprehensive regulation of cryptocurrency transactions and gained serious advantages in the creation of the digital economy.
Is it possible to mine legally in Belarus
In most countries, cryptocurrencies do not have a legal status. While governments decide on their attitude to digital money, the industry can develop in the “gray zone”.
In Belarus, legal mining appeared after the adoption of Decree No. 8 “On the Development of the Digital Economy”. In addition, the decentralized nature of blockchain technology was legislatively enshrined. This means that the state, although formally, does not claim to manage cryptocurrencies.
Features of Decree No. 8
Regulation of cryptocurrencies in Belarus is one of the few cases where the state does not seek total control of the digital industry. Decree No. 8 aims to simplify the work with virtual assets and quickly integrate them into the existing norms of civil law. It is possible to buy cryptocurrency in Belarus legally. Mining is also in the legal field.
| Regulation | Explanation |
|---|---|
| A minimum of legal formalities for mining coins | If a miner works independently and does not hire employees, the activity is not considered entrepreneurial. |
| Legalization of ICO | The project can be launched in partnership with a resident of the High Technology Park (HTP). It is not necessary to be a citizen of Belarus. |
| It is allowed to create exchanges and exchangers of cryptocurrencies | This right is granted to legal entities and IEs. To launch an exchange, one should deposit Br1 million (BYN) in a bank account, while for an online exchange – 200 thousand BYN. |
| Maximum simplification of operations | There is no need to obtain a license (or other permits) for mining and transactions with cryptocurrencies. The transfer of assets is considered completed at the moment a record of the transaction appears in the blockchain. State registration of ownership is not required. |
| HTP residents can pay for goods and services with digital assets | Other companies and individuals use only national currency for payments. |
Decree No. 8 has a limited period of validity. The loyal legal regime of the HTP is set until 2049.
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Taxes
After the entry into force of the document, the country has created a legal framework for the development of decentralized technologies. A special tax regime is in force in the territory of the High Technology Park. Companies registered in the HTP can enjoy benefits regardless of the actual location. Such tax breaks have been introduced until 2023:
- HTP residents do not pay levies on income from turnover and mining, as well as from the creation, purchase and sale of tokens.
- If individuals do not employ hired personnel, they do not need to pay income tax.
- Companies and entrepreneurs who are not registered in the HTP do not pay deductions on profits from the exchange of tokens. But the income received from the conversion of cryptocurrency into fiat is subject to declaration.
- HTP residents do not pay income tax on the launch and sale of tokens. VAT is also not levied on such transactions.
The special tax regime has a downside. Companies and citizens will not be able to refund VAT paid when importing equipment for mining and token creation into the country.
Liability and penalties
Only HTP resident organizations are allowed to pay for goods with digital assets. For other market participants, settlements in cryptocurrency are prohibited. Violators face an administrative fine of 20 thousand BYN, confiscation of coins and purchased goods.
Individuals and companies-residents of the HTP can mine digital koins. This type of activity is not available for companies that are not registered in the Hi-Tech Park.
The director of a company can mine assets as an individual. But if it is proved that employees were involved in the organization of the farm, the company will face a fine of 14.5 thousand BYN with confiscation of mined coins and equipment.
The future of mining in Belarus
In 2020-2021, cryptocurrency legislation in many countries has become stricter. China, Sweden, Abkhazia introduced a total ban on mining. In January 2022, the Bank of Russia proposed to restrict the creation, exchange and sale of digital assets. However, Belarus has maintained its position on digital currencies. Today it is the first state in the world with a comprehensive legal regulation of the blockchain industry.
According to President A. Lukashenko, the government seeks to create conditions for the inflow of foreign capital into IT. A favorable climate, government support and cheap electricity attract investment in Belarusian mining. In 2023, 10 thousand farms are legally operating in the country. Farm owners pay for electricity at preferential rates. The country has already developed “cryptotourism. Foreigners move to Belarus to legally mine digital coins and sell them for fiat.
Summary
According to Whitebird, there are 8 major mining companies operating in Belarus in 2023. The country offers competitive conditions for cryptocurrency mining: an already established legal field and a surplus of electricity. Until 2023, miners do not have to pay tax on profits. This attracts foreign investment to the country.
In 2023, new prospects are opening up in the mining sphere. An additional unit of BelNPP will be launched. This will reduce electricity prices. According to the Belarusian company ASER, since November 2021, 10 investors from Russia, China and other countries have approached them with a request to register a mining farm. Head of State A. Lukashenko believes that the adopted bills will help Belarus to actively develop in the field of creation, exchange and sale of cryptocurrencies.
Frequently Asked Questions
❓ What is a Hi-Tech Park?
HTP is a simplified legal regime for companies related to information systems and blockchain development. Residents receive government support.
❌ Is it possible for legal entities to mine in Belarus without registering in the HTP?
No. It is prohibited by law. An offending company will be fined 14.5 thousand BYN and the cryptocurrency and equipment will be confiscated.
💰 What tax do private miners pay?
If an individual mines digital coins without hiring staff, there is no need to declare profits. The benefit is valid until 2023.
✅ Do miners registered in the HTP have to pay tax on profits?
Preferential conditions apply to resident companies of the High Technology Park until 2023. These organizations are exempt from profit tax on the creation, exchange and sale of cryptocurrency.
🕖 Does Decree No. 8 have an expiration date?
The legal regime established by the document will operate until 2049. Tax benefits apply until 2023.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
