Early in 2018, the government of Belarus put into place official policies intended to move the country toward the digital economy in a way that would put it ahead of most of Eastern Europe.
Now, just over 8 months later, the number of companies involved in the digital economy in Belarus has gone through the roof. According to data from the Belarus High Technologies Park (BHTP), the number now stands at 338.
What Belarus has done in such a short amount of time offers a shining example to other Eastern European countries looking to promote the digital economy within their own borders. The results of Belarus's Decree №8 shows that official government policy can promote the digital economy without necessarily interfering with it.
About the decree
The official name of the decree signed into law in December 2017 is "On the Development of a Digital Economy." What did it do that is so good? A number of things. First of all, the decree legalized all sorts of digital practices including crowdfunding and cryptocurrency mining. Crowdfunding is especially important because it allows the issuance of initial coin offerings (ICOs).
The decree also made digital asset exchange legal. This is important to both businesses and consumers alike. Legalizing digital asset exchange now makes it possible for people to buy and sell using Bitcoin, Bitcoin Cash, Ethereum, Litecoin, etc. In turn, that means online casinos authorized to do business in Belarus can do so using Bitcoin and other cryptos.
Here at Coinbet.com, we are always in favor of people having the ability to use their favorite cryptocurrency to do what they want to do. We see the development in Belarus as a positive thing for both gamblers and non-gamblers alike.
The only downside to the Belarusian decree is the fact that companies involved in the crypto space must register with the government's BHTP agency. Registration is in keeping with regulations that seek to prevent the Belarusian digital economy from helping to facilitate things like money laundering and crypto fraud.
Belarus's new crypto businesses
Now that Belarus is promoting the digital economy, we expect a whole bunch of new businesses to pursue their piece of the crypto pie. For the time being, most of the companies already registered with the BHTP are tech companies - specifically in the IT and software development fields. That is understandable.
The tech industry will be at the forefront of developing digital assets in Belarus, just as they are in the rest of the world. Think about it. You need software developers to come up with new cryptocurrencies and blockchains. You need IT experts to develop the networks on which all these digital assets will run. Without the tech sector, the digital economy does not work.
One of the companies now active in Belarus is known as Aetsoft. They have been in business since 2014, providing technology services to both ICOs and crypto exchanges. They already do business in multiple countries around the world, so getting involved in Belarus will be good for their bottom line.
Another company recently registered with BHTP is one that specializes in developing mining services. Pm Pool offers their services exclusively within the Commonwealth of Independent States and the Baltics.
With 338 registered businesses now operating in Belarus, we could give countless examples of the kinds of digital asset services now operating there. You get the point. The takeaway here is to understand that the strides Belarus has made in just eight months are breathtaking. It is nothing short of a miracle.
No companies trading digital assets
Digital economy experts in Belarus note that, at the current time, there are no companies actually trading digital assets yet registered with the BHTP. Belarus's government hopes to change that in the near future. To do so however, they have some challenges to overcome.
A great article on the Bitcoin.com website explains that the Belarusian economy and legal system is not quite ready for digital asset exchange on a large scale. One of the biggest problems is the lack of a solid legal framework.
With laws and regulations still a bit hazy, companies are a bit weary of doing business in Belarus out of a fear that they could run into legal trouble. Attempting to maintain compliance when laws and standards are not that clear is never an easy thing. That said, it could be even more difficult in the crypto space given the ability of bad actors to exploit it.
Imagine operating an online casino in Belarus without a solid legal framework to look too. All it would take is a single bad actor to exploit the casino for money laundering purposes and you'd have the entire government machine cracking down on online gambling. Operators are just not ready to take that risk yet.
The Belarusian banking system
Another difficulty right now is the Belarusian banking system. Bitcoin.com says that it has been lukewarm toward crypto all along. Commercial banks in Belarus are not willing to facilitate digital asset exchange until they have a clearer picture of the direction government will take.
One of the big questions on our end is this: does Belarus really need involvement from the traditional banking sector to make the digital economy work? For the purposes of actually buying crypto, yes. People need to be able to use fiat currency to purchase Bitcoin, Litecoin, etc. But that's as far as it goes.
Digital asset transactions between buyers and sellers do not require the involvement of banks. That is the whole point of turning to cryptocurrency and leaving fiat currency behind. Unfortunately, the Belarusian government wants the banking sector to have a hand in the digital economy in order to exert at least some control over it. That is both good and bad.
Some amount of regulation helps to keep criminals and fraudsters in check. By the same token, too much involvement by government and central banks defeats the entire purpose of digital assets. Here's hoping that the Belarusian government and its banking system limit their involvement as much as possible.
The big concern for Belarus
It wouldn't be right to wrap up this post without discussing one of the big concerns for the Belarusian digital economy. You might call this concern the elephant in the room. What is it? The real possibility that the digital economy there will not actually benefit the average consumer.
The Bitcoin.com article clearly states that digital economy experts have expressed doubt that "the country's own crypto sector and ordinary Belarusians would be able to benefit from the presidential decree on the digital economy." Those same experts believe that without comprehensive regulation, Belarus will become the digital economy's offshore haven in that part of the world.
Is this legitimate concern? Possibly. Being involved in the online gambling space, we keep our eyes and ears open for any news on the crypto space and how it impacts online gambling. We know from watching the news that there are countries that essentially act as offshore havens for questionable crypto practices.
We could see Belarus running into similar problems if they don't craft their regulations in the right way. But it would be best to keep the scope of those regulations limited to asset exchange in general. If the Belarusian government tries to regulate cryptocurrencies too tightly, they could actually create the problem they are hoping to avoid.
Good for online gambling
At the end of the day, we are pleased to see what is happening in Belarus. They have set an example that other countries can follow in terms of officially recognizing the digital economy and cryptocurrencies. By recognizing it and making digital asset exchange legal, the Belarusian government has given the green light to develop digital assets more fully there.
That is ultimately good for all things cryptocurrency. It is certainly good for online gambling inasmuch as digital asset exchange will make it a lot easier for gamblers and casinos to do what they do in Belarus.
Would it be that other countries throughout Eastern Europe and Asia would take such a pragmatic approach to cryptocurrency. The more the powers-that-be get on board with the digital economy, the faster we will start reaching some of the goals that remain on the horizon.
We don't know if the world will ever reach that point at which fiat currency no longer has a legitimate use. Yet that is the goal of cryptocurrency futurists. Not only do they want to see people gambling only with cryptocurrency, they also want the crypto mindset to replace fiat currencies altogether.
Should that goal ever be realized, Bitcoin gambling will be just one of the many things that consumers can do with their crypto. They will also be using their digital assets to buy fuel for their cars, pay for their holidays, and even buy the groceries that will feed their families.
Belarus's push toward the digital economy is a very good thing. They now have set an example that others can follow. We sincerely hope that other countries do stand up and take notice. We ought to be making the digital economy easier to pursue by legally recognizing it and then implementing commonsense regulations that combat criminal activity without inhibiting legitimate commerce.