Belarus forces banks to use cryptocurrencies to evade sanctions
- Cryptocurrencies gain ground in Belarus' banking system
- Tokenization and smart contracts arrive in the financial sector
- Sanctions accelerate digitization and use of digital assets
Belarusian President Alexander Lukashenko has ordered the country's banks to expand the use of cryptocurrencies in response to increasing sanctions imposed by Western countries. The measure aims to ensure that the local financial system continues to operate efficiently, even in the face of restrictions imposed since 2020.
In a meeting with representatives of the National Bank and executives from major commercial banks, Lukashenko emphasized that digital asset transactions are more prevalent than ever. According to him, "cryptocurrency-based transactions are more active than ever, and their role in facilitating payments is growing."
Data shared by the president himself reveals that external transactions via exchanges totaled US$1,7 billion in the first seven months of the year. The volume is estimated to reach US$3 billion by December.
Lukashenko also advocated for the use of tokenization in the financial sector, stating that it would reduce dependence on intermediaries, increase automation via smart contracts, and give users more control over their assets. For the president, "digitization here is not for its own sake, but to have a real economic effect."
Belarus' move is seen by analysts as a similar step to that taken by Russia, which has already created a ruble-pegged stablecoin. According to Andrew Fierman, head of national security at Chainalysis, Russia "has successfully evaded legislative sanctions and already developed a ruble-backed stablecoin," which has helped "shape its parallel cryptoeconomy."
Recent reports also indicate that Russian entities have used Kyrgyzstan's cryptocurrency sector as an alternative route to circumvent sanctions, with local companies operating as fronts and linked to the Russian exchange Garantex. Since the passage of favorable legislation in 2022, the volume of these transactions reached US$4,2 billion by mid-2024, driven primarily by Russian users.
The European Union has maintained severe sanctions against Belarus since the 2020 elections. Valid until February 2026, the measures include asset freezes, financial restrictions, and travel bans, affecting 310 individuals and 46 government-associated entities. Given this, the increased use of cryptocurrencies emerges as a strategy for the country's economic survival.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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