Crypto business in Belarus, bitcoin and other cryptocurrencies

Belarus is one of the few countries in the world that have prepared and issued legislation related to the regulation of new digital assets. But at the same time, the requirements for applicants turned out to be quite stringent.

Large crypto exchanges do not want to spoil relations with countries where issues with the status of tokens have already been resolved at the state level. Due to inappropriate conditions for obtaining permission to operate (audits, authorized capital, reserve for client funds, etc.), companies decide to bypass the market. The government made the procedure for obtaining a permit quite problematic by equating the conditions to the level of obtaining a license for banks. Added to this is the small volume of the market occupied by local organizations and services that allow trading without identity verification, so large crypto exchanges have no desire to risk their status.

Belarus in the ranking of countries according to conditions for crypto business

The Republic of Belarus is famous for its favorable conditions for carrying out crypto business for neighboring countries, but is not among the top best. This is due, first of all, to the ban on paying for products or any services with cryptocurrency if the company is not a HTP resident. At the same time, transactions with tokens do not require payment of VAT, which significantly improves the situation of crypto business in Belarus.

A positive aspect is also the clear definition of cryptocurrency and smart contracts in legislation. However, questions remain about the application of existing laws in practice.

Belarus is not among the top ten countries for the development of crypto business, but is ahead of the CIS countries, including Russia and Ukraine.

What is Bitcoin?

The most popular and well-known cryptocurrency is Bitcoin. Cryptocurrency is a type of digital currency. The term cryptocurrency was assigned to Bitcoin back in 2011 after the publication of an article about Bitcoin in Forbes magazine. This system is decentralized, and currency is issued through mining and forging. The most common method is the so-called Bitcoin mining. The procedure is that Bitcoin is mined using the available computing power of your computer. That is why they are now buying up quite powerful video cards for computers in order to thereby mine cryptocurrency, including Bitcoin.

Bitcoin and legislation

At the moment, the concept of cryptocurrency (digital currency) is not in the legislation. Back in early 2014, the Deputy Chairman of the Board of the National Bank of Belarus said that Bitcoin has no legal basis for its use in the territory of the Republic of Belarus. The government warns that the use of cryptocurrency carries increased risks for individuals using this digital currency. Previously, the Ministry of Internal Affairs recommended refraining from transactions with bitcoins for both individuals and legal entities. The main thing that confuses the authorities is the lack of regulation at the legislative level in this area.

Why is Bitcoin not covered by our legislation?

Our legal experts are faced with a problem: how best to identify Bitcoin. If you look at our legislation, then legally there is no definition that covers the concept of cryptocurrency, which means that Bitcoin cannot be defined. Article 141 of the Civil Code defines what money is. money means the Belarusian ruble, which is legal tender, and foreign currency. Next, let us turn to the concept of foreign currency. In accordance with paragraph 4 of Article 1 of the Law “On Currency Regulation and Currency Control,” foreign currency means banknotes in the form of banknotes, treasury bills, coins, as well as funds in bank accounts in foreign currency units. It turns out that cryptocurrency does not fall under these concepts given in the legislation.

There are similarities between cryptocurrency and electronic money:

The very fact of existence on the Internet
Electronic money must be denominated in Belarusian rubles or foreign currency
Possibility to pay for goods (services).

The main difference between electronic money and cryptocurrency is electronic. money is issued by a bank accredited in the country, in accordance with the legislation of the Republic of Belarus, but cryptocurrency is not

Is it possible to use cryptocurrency as a means of payment?

In general, yes, it is possible, but there are a number of peculiarities. It is necessary to introduce the concept of cryptocurrency at the legislative level. Then establish the legal status. People will gradually get used to this type of payment means. The peculiarity is that there is no body in the country that is the issuer of this currency or somehow controls it. In addition, as we know, Bitcoin grows (falls) at incredible rates compared to any currency or security. For example, in some countries of the European Union, Bitcoin and other cryptocurrencies are already used as a means of payment. China has introduced a ban on the use of legal bitcoins in circulation. persons, but individuals do not have this prohibition.

Taxes and cryptocurrency in the Republic of Belarus

Since this currency does not relate to cash and does not exist in kind, in accordance with the legislation of the Republic of Belarus, the issue of cryptocurrency and transactions with it (crediting to one’s e-wallet) are not subject to taxation. This is because only income is subject to income tax. It is known from civil norms that income is an economic benefit expressed in cash or in kind. It turns out that when you mine Bitcoin you do not fall within the legal framework. It follows that income tax will be subject to income tax when you exchange Bitcoin for money or property.

The future of cryptocurrency in Belarus

Hooray! It's finished!

It became known that the draft decree “On the development of the digital economy” was signed by the President of the Republic of Belarus.

This decree allows a lot to be done with cryptocurrencies: individuals are allowed to own, mine (mine), buy, sell, exchange for Belarusian rubles and foreign currency. It is also possible to give and bequeath digital currency. There is even an exchange for electronic money. Here the state provides ample opportunities for the development of cryptocurrency, which is good news.

Very important information!

In accordance with the decree, all transactions with cryptocurrency will not be taxed! At least until January 1, 2023 it will be this way.

The above means that soon it will be possible to pay with bitcoins everywhere and the list of organizations will be replenished. However, there are already a couple of such organizations that accept cryptocurrency as a means of payment. One of the first to start accepting it was the TYREPLUS network of tire service centers.

Requirements for running a crypto business

Technical requirements for companies in the field of crypto business

The technical requirements for crypto business include:

The need for consumer identification;
Combating corruption, money laundering, sponsorship of terrorist activities and other crimes;
Interaction with financial monitoring authorities if necessary;
Presence of an AML Compliance Officer with the necessary qualifications and skills.

Compliance of companies with these requirements is verified by auditors.

Financial requirements for companies in the field of crypto business

The minimum authorized capital can be an amount equal to 2 million Belarusian rubles, and for ICO operators the authorized capital starts from 500 thousand Belarusian rubles.

Requirements for crypto platform operators

Crypto platform operators are obliged to:

Identify consumers of financial transactions;
Keep separate records of the currency of the operator of the crypto platform and the currency of consumers, which is held by the operator of the crypto platform;
Maintain a record of each consumer's transactions and send it to the appropriate organization;
Monitor the legality of transactions with cryptocurrency.

Requirements for conducting an ICO

An ICO can be conducted by any legal entity that is a HTP resident or acting through an HTP resident intermediary.

Individuals organizing an ICO must create and list tokens to order. To do this they need:

Identify token owners;
Sell tokens to residents of the Republic of Belarus who are qualified investors;
Perform risk management;
Monitor the legality of token advertising.

ICO customers, in turn, can be persons with a good reputation and the presence of key personnel.

Requirements for personnel of cryptocurrency companies

Special selection criteria are applied only to the manager, chief accountant, system administrator and persons responsible for risk management, prevention of money laundering and cybercrime, and compliance with HTP rules.

Such employees must not have outstanding convictions for economic crimes or crimes against information security.

Over the past two years, there should be no dismissal at the initiative of the employer when the person committed guilty actions.

An important criterion is the absence of a court decision over the past three years on the guilt of a citizen in the bankruptcy of any legal entity.

Also, these persons must have the appropriate qualifications for the position.

Cryptocurrency

What are cryptocurrencies

Cryptocurrency is a currency that exists only in the digital space. It is created and moved through cryptography, typically using a blockchain. Simply put, cryptocurrency is artificially created money.

Bitcoins

Bitcoin is the first and most popular type of cryptocurrency. Appeared in 2009. Its prevalence is due to official recognition in a number of countries.

The price for Bitcoin, as a rule, increases and its forecasts are also favorable.

Tokens

A token is another type of cryptocurrency. It is inferior in popularity to Bitcoin, but is nevertheless in demand. It is based on blockchain. It is universal and can be used in various types of operations.

Other cryptocurrencies

The most popular cryptocurrencies after Bitcoin are:

Ethereum. Was created in 2015. The technology is used to register transactions, transfer resources or copyrights.
Litecoin. Derived from Bitcoin. First appeared in 2011.
Dash. Previously ‒ Darkcoin. Uses a minimal amount of resources for mining.
Primecoin.
Peercoin.
DogeCoin.
Namecoin and others.

There are a large number of them, but only a few are officially recognized. It is necessary to understand that buying any cryptocurrency is a big risk.

Mining

The process of mining cryptocurrency is often compared to mining, and is therefore called mining. The mining process is based on blockchain technology, and more specifically on the creation of new blocks in the blockchain.

A cryptocurrency transfer transaction typically includes information about two wallets, the transfer amount, and a timestamp. A special encryption key is created and sent to other nodes of the system. Cryptocurrency mining is now more difficult than ever. The complexity of calculations increases after each period of time, and the reward for them decreases in accordance with the laws of cryptocurrencies. For example, only industrial-sized mining farms can now mine Bitcoin without any disadvantage.

Cryptocurrency wallet

Cryptocurrency wallets are digital and physical methods that use public key cryptography to allow customers to securely send and receive cryptocurrency online.

In other words, the presence of such a wallet is necessary for storing, selling, buying cryptocurrency. The main purpose of this wallet is to store the secret key, which is needed to access funds.

Cryptocurrency exchange

Cryptocurrency exchange can be carried out on specialized cryptocurrency exchanges.

The exchange rate of such a currency to ordinary money depends on economic, technical and social factors. For example, on the number of purchases and sales for cryptocurrency, on the volume of cryptocurrency production, on the complexity of its production, on the number of miners, on demand.

As a rule, exchanges exchange one cryptocurrency for another or for US dollars.

Cryptocurrency as a means of payment

In terms of the use of payment systems, cryptocurrency is somewhat reminiscent of electronic money.

However, electronic money is issued only by banks in exchange for real money in material form. While any person can issue cryptocurrency. It is for this reason that cryptocurrency, as a means of payment, is associated with certain high risks.

Although payment using crypto is not prohibited, nevertheless, only cash and non-cash payments are recognized in Belarus, which means such payments do not have legislative protection.

Taxes and cryptocurrencies in Belarus

In Belarus, transactions with cryptocurrency (issue, purchase, sale, etc.) are not yet taxed. However, when exchanging digital currency for real money or other tangible things, you will have to pay income tax, since in this case you receive a material benefit in kind from the transaction.

How to buy Bitcoins in Belarus - options

The legalization of virtual money has made cryptocurrency accessible to everyone. There are many ways to acquire Bitcoin for further sale, purchase of goods (services) or long-term investment. Below we will look at the main ways to buy Bitcoins in Belarus.

Exchange

A popular way to buy cryptocurrency, which is also available in the Republic of Belarus, is to use the services of an exchange platform (for example, Yobit or EXMO). Such services allow you not only to exchange virtual money, but also to make money on the difference in rates (if you have special knowledge). For clarity, graphs with the exchange rate price of virtual currencies are offered, which provides information about the cost of money online and helps make purchasing decisions.

When choosing an exchange platform, you should give preference to international services, for example, EXMO, which was mentioned above. This is an accessible and reliable exchange where you can quickly and safely purchase Bitcoins. Before exchanging, you should do the following:

Understand the features of the service.
For beginners, the most important concept is quotation. In our case, we are interested in the Bitcoin (BTC)/Russian ruble (RUB) pair. There is no direct purchase for the Belarusian currency yet, so the money entered into the account must be converted into one of the available monetary units, and then buy Bitcoin. Another tool is a price movement chart, which allows you to see changes in the Bitcoin rate over different time periods.
Complete registration.
To get started, you need to register and then log in to the EXMO cryptocurrency exchange. Immediately after logging in, a wallet is created that can be used inside the site.

Next, to buy Bitcoin in Belarus using the EXMO exchange, you need to take the following steps:

We deposit money into the site account in dollars, rubles, euros or other currencies. This can be done in different ways, including through WebMoney or Yandex.Money. If you only have Belarusian rubles on hand, you will have to first convert them, and then put them on the exchange.
Select the direction for exchange (for example, BTC/RUB). This means that Bitcoins will be purchased for Russian rubles.
Go to the “Exchange” section (for novice users). The “Trading” section is more suitable for participants who make money on the difference in rates of virtual currencies and understand this issue.
We decide on the direction of exchange, and then indicate the number of rubles for exchange. The system automatically displays how many Bitcoins will be purchased for this amount.
We confirm the operation.
We go to the wallet and make sure that Bitcoin has appeared on the account. All that remains is to withdraw your cryptocurrencies to your Bitcoin wallet.

This method of buying BTC in Belarus is good because you can exchange at the best rate and without risk to your wallet. On the other hand, it is worth remembering the system commission. In addition, beginners will have to understand the intricacies of the service to conduct an exchange (especially if they carry out the conversion through the “Trading” section).

Exchange offices

If you are interested in the question of how to easily and quickly buy Bitcoin through an EPS wallet or other methods, you should pay attention to exchangers. In the CIS countries there are many services with the possibility of conversion, which can also be used by residents of Belarus. There are no complicated terms here, and the exchange process takes no more than 2–3 minutes. The exchange rate changes throughout the day, but within insignificant limits. Despite the legalization of Bitcoin in Belarus, there are still no exchangers with the ability to exchange Belarusian rubles for Bitcoins. The operation can only be carried out through preliminary currency conversion.

To buy Bitcoin in the Republic of Belarus through an exchanger, you need to do the following:

We create a Bitcoin wallet where the cryptocurrency will be credited (if it doesn’t exist yet).
We convert Belarusian rubles into the currency accepted by the exchange office. This operation can be done in advance or directly at the service itself. Options - exchange for Russian ruble, dollar, euro and other currencies.
We decide on a suitable service (for example, using BestChange). When choosing, we pay attention to the reputation of the site, the amount of available reserve, exchange rate price and reviews. The presence of bad comments is a negative factor, so it is better to refuse such a platform.
We go to the website of the selected service and register on it. All information must be entered correctly to avoid errors during the exchange process.
We select the direction of interest for conversion (there are more than a dozen of them) and indicate the amount that is given to purchase Bitcoin.
We confirm the operation and, after the time set by the platform, make sure whether the money has been credited to the Bitcoin wallet account or not.

If any difficulties arise, you must submit a request to the service support service describing the problem or contact online. The method with exchangers is good for its convenience and simplicity for beginners. On the other hand, the system sets an undervalued exchange rate, and the risk of delaying the transfer remains.

Direct purchase

Another option is direct cooperation with other individuals who are ready to sell cryptocurrency. Using this method, you can buy Bitcoin in Belarus using a card, cash or EPS. The search for a transaction partner is done through special forums or websites (for example, Localbitcoins.com). The latter option is more preferable, because you can find a seller from Belarus and check his reputation.

The purpose of the Localbitcoins.com service is to perform intermediary functions. It does not guarantee the success of the operation, but it offers an internal protection mechanism that allows you to carry out a transaction with less risk (the name of the escrow system). The method of transferring money depends on the agreement between the parties. For example, a buyer can transfer Belarusian rubles to the seller’s card, after which Bitcoins are credited to the cryptocurrency wallet.

Thanks to a direct agreement, you can avoid commission payments and discuss a convenient way to transfer money. In addition, unlike other options, it is possible to directly exchange Belarusian currency for Bitcoin. The other side of the coin is the risk of running into a scammer who will receive the agreed amount but will not transfer the money, as well as an unfavorable exchange rate for direct conversion. To reduce risks, it is important to work only with trusted private traders who have a high rating and a positive reputation.

Purchase via WebMoney

The WebMoney system has been operating in the territory of the Republic of Belarus for a long time and has an internal cryptocurrency Bitcoin (WMX). Essentially, this is the equivalent of 0.001 BTC. The guarantor of WebMoney in Belarus is Technobank, so the activities of the payment system are completely legal.

To buy Bitcoins through WebMoney for Belarusian rubles, you need to take the following steps:

Register in the WebMoney system.
We create an electronic wallet in national currency (WMB).
We top up the account with Belarusian rubles.
Change WMB to WMX.
We exchange the received funds for Bitcoins through a Bitcoin wallet.

The good thing about this method is that it is safe for Belarusians and allows for direct conversion. The only difficulty is that to carry out the operation you will have to carry out many actions, which takes some time.

Buying futures

In December 2022, another way to buy Bitcoin was added - through the US commodity exchanges (CME and CBOE). This option is more suitable for investors who do not need cryptocurrency itself, but consider it as a tool for savings. You cannot directly buy futures on the mentioned exchanges - for this there are brokerage companies that act as intermediaries. If you want to purchase a contract for Bitcoin, you need to select a broker, register, deposit money into your account, and then make purchases and sell futures, making money on the difference in rates. To make a profit in this way, you need to know the principle of operation of exchange platforms and the essence of futures contracts.

Intermediary services

After the legalization of Bitcoin in Belarus, special services appeared (for example, bitok.by), offering services for buying/selling Bitcoin in different ways - through a bank card or WebMoney, as well as using cash. The client selects the appropriate option, then submits an application and agrees on the time of the transaction. In fact, this is one of the options for direct exchange with the difference that the counterparty is a service specially created for this purpose. The benefits and risks are similar here.

Legislative regulation of crypto business in Belarus

The Republic of Belarus is famous for its convenient legislation for the development of crypto business.

According to the legislation of the Republic of Belarus, HTP residents have the right to legally conduct cryptocurrency business, register exchanges and exchangers, conduct ICOs and engage in mining.

The Belarusian government actively promotes the development of new technologies and has even established a zero tax regime for transactions with cryptocurrencies.

The main regulatory legal acts governing this area are:

Decree No. 8 “On the development of the digital economy”;
Regulations on the High Technology Park.

KV.by

Recently, there has been a stir around cryptocurrency and mining. On the Internet, people are increasingly relying on machines to earn that kind of money. Moreover, the choice is not represented by a dozen system units, but by a very wide assortment. There are even several offers for assembling cars to order.

And not so long ago a funny photo caught my eye:

So what is this cryptocurrency anyway? What is its value? How to receive, withdraw or use? In this article I will try to answer, if not all, then some of the questions.

What is cryptocurrency?

This is a digital type of money that, without exchange transactions for existing currencies, cannot be touched. It is impossible to counterfeit these virtual funds, because... all information about it is encrypted, which is directly indicated by the prefix “crypto-”.

The very first cryptocurrency to appear was BitCoin. By the way, it is now one of the most popular digital money. Today there are quite a few of them: Ethereum, EthereumClassic, Litecoin, Hush, Zcash, Expance, Zencash and others.

The scope of application of such a currency is very wide. It can be exchanged for real money for subsequent withdrawal, paid for purchases and services (if the seller accepts this form of payment), etc. Cryptocurrency in its pure form is used only on the Internet.

Key features of digital money:

Absolute freedom. No one is above cryptocurrency. It is impossible to artificially increase or decrease its quantity on the Internet. No state can influence such a currency. This also determines the finality of transactions with such money: only participants in the transaction can make changes or cancel the transaction.
Free access. To work with digital money, you only need a client.
Easy tracking. The history of all transactions is saved and stored in the system. It cannot be deleted.
Anonymity during payments. Even knowing the wallet address, it is impossible to find the owner.
Security. The already high level of protection is growing all the time. So hacking and theft of electronic money is negligible.

How to get cryptocurrency?

The mining process is called mining. Transactions with any cryptocurrency are saved as history and divided into blocks. Each block reports data about its predecessor in hashed form with specific conditions. Those. mining is the selection of parameters under which the hash takes on the proper form. Selection is carried out by applying all possible options.

Essentially, miners' computers solve a cryptographic problem. Due to the complexity of the process, strong video cards are needed.

Having found the hash, the user receives a certain amount of digital money. Virtual funds are divided among users in proportion to the power of the mining machine.

PC for mining

We've sorted out the loot. But what kind of hardware should a PC have in order for it to be profitable? Since the PC solves a cryptographic problem, it needs a GPU graphics processor (or a powerful video card) and, preferably, more than one. Of course, you can try to mine cryptocurrency through the central processing unit (CPU), but this is absolutely unprofitable.

GPUs on different chips are selected for each type of cryptocurrency. Ethereum currency is mined with a regular but powerful video card. But, for example, a video card will not have enough performance for Bitcoin. Therefore, it is mined on FPGA chips (can be programmed for different tasks) and ASIC (performs only a specific task, reprogramming is impossible).

Those. if you mine on a video card, then, if there is no profitability, it can be used to mine other currencies or even sold as a component for a PC. But the FPGA will have to be programmed again, and the ASIC will have to be thrown away or sold, which is unlikely.

In our country, the most common PCs for mining (“farms”) with video cards. Their cost ranges from 4,000 to 20,000 rubles. The price of the “farm” varies depending on the components. The majority of the price comes from graphics cards. It is worth noting that this section also includes used “farms”.

If you assemble a new machine from top-end video cards (for example, PalitGeForce GTX 1080 TiFoundersEdition at a price of 3,000 rubles) in the amount of 5 pieces, then the price tag will be around 20,000 rubles. The cost is rather high, but this “farm” is very productive.

Let's make an approximate calculation of the costs of purchasing a top-end “farm” with an annual use of electricity (let’s say you mine for 8 hours a day):

Car – 20,000 rubles ($10,000);
The electricity tariff is differential (at the moment – 0.155 rubles kW/h ($0.0775 equivalent, but we will round up to $0.1. Why – below in the text)). This means that you will spend per year: 0.1 x 8 x 365 = $292.

In total you will need approximately $10,292 with 1 year of work at the start.

Estimated profit of work

To evaluate the work, we use the WhattoMine website. In it you can choose a cryptocurrency, indicate the hashrate (the computing power of your “farm”), the cost of equipment and kWh (on the website the minimum value is $0.1).

The screenshot shows the approximate profitability of Ethereum mining, based on which we will carry out the calculation:

Income for 1 hour – $8.3.

Therefore, per year you will earn at a stable rate: 8.3 x 8 x 365 = $24,236.

Net profit for the year will be: 24,236 – 10,292 = $13,944, i.e. this is almost 27,888 BYN. rubles

No one forbids spending more time per day mining, but this increases the wear and tear on the “farm”.

Risks

Everything looks very nice in numbers. Almost fabulous. But there are pitfalls that you definitely need to remember.

Cryptocurrency rate. It is constantly changing. This means that a profitable currency today may become unprofitable tomorrow, in a month, etc. For example, 1 Bitcoin cost $1,100 in 2013, $450 in 2014, $1,000 at the end of 2016, and in the spring of this year there was a peak of $2,760.
Cryptocurrency transactions are regulated only by the participants in the transaction. If you mess up somewhere, you won’t be able to go to court. In addition, our legislation does not in any way control their use in our country. There are officially no prohibitions on the use of cryptocurrency, but there is also no freedom to work with it.
Problems may arise with paying for goods and services in our country. Cryptocurrency does not have the status of a means of payment, so problems may arise in the form of finding a buyer for this type of money.
Questions with tax authorities. The problem of accounting representation of cryptocurrency arises: income tax is levied on cash or in-kind income, and virtual money is neither one nor the other. You can calculate the tax if you only cash out this currency. But there are no official statements from the Ministry of Taxes and Taxes of the Republic of Belarus, and what will happen in each specific case is unknown.
Due to the lack of control over cryptocurrency transactions, all transactions can be regarded as potential receipt of funds obtained illegally (money laundering). And this is already a criminal matter.

Summing up

What do we get in the end? Mining is profitable and highly profitable. But it is now profitable in a specific currency. But, on the other hand, questions arise with our legislation and a large amount is needed to start work in this matter.

All calculations given in the article are approximate. Using the existing example, you can calculate the profit on a cheaper version of the “farm”. This will significantly reduce the initial investment. But potential profits will also decrease.

Hi-Tech Park and crypto business

Decree No. 8 opened new horizons for HTPs in the crypto business. Thanks to the new legal act, various preferences have appeared for residents for the next 30 years. Conditions for foreign workers have improved (no need to obtain special permits for up to six months). Cryptocurrency transactions have become legal and also exempt from VAT until 2023.

However, crypto business is not the main direction for the HTP, so there are clear entry regulations and requirements for companies wishing to carry out relevant activities in Belarus.

Photo: static.life.ru, avatars.mds.yandex.net, cdn.wccftech.com