Could Belarus Use Bitcoin to Beat US-EU Sanctions?
With much of the international community enraged at the Alexander Lukashenko-led government of Belarus following a controversial recent general election, the threat of a new wave of United States-led economic sanctions against the nation and its leadership has become very real.
The European Union yesterday stated that its foreign ministers were already considering “targeted sanctions,” with America’s Secretary of State Mike Pompeo also talking up the notion of imposing financial penalties on Minsk.
The move has led many in the region to question whether Belarus’ fledgling crypto industry might come into play, become a target – or even help Minsk avoid the fallout of sanctions.
A number of nations that have found themselves at odds with the United States have already attempted to turn to the crypto sector – with mixed results.
While North Korea has reportedly been perfecting the art of raiding crypto exchanges based in American-allied nations, Venezuela has had less luck – instead leaving its president “sitting on” large amounts of bitcoin (BTC) and ethereum (ETH) he is reportedly having trouble shifting.
Speaking to Russian media outlet RBC, experts stated that even if Belarus were to find a way to get around sanctions using crypto, this would be little more than a “band-aid,” with the economy sucked into recession due to the wider implications of economic sanctions. Similar crypto-powered efforts in Venezuela and Iran, the experts stated, had largely failed to save those nations' economies.
Belarus’ situation is somewhat different, however, as the nation has been actively pushing pro-crypto policies for over two years now – and has built up a very profitable crypto industry at the multi-million-dollar Hi-Tech Park in Minsk.
The park has been an economic success, pulling in USD 2 billion worth of revenue in 2019 – 4% of the country’s GDP. As such, it could well become a target for those drawing up sanctions plans.
The same media outlet quotes Valery Petrov, Vice President of Market Development and Regulation for the Russian Association of the Cryptoindustry and Blockchain, as stating that should sanctions be imposed in the IT sector, they may “instantly” polarize the Belarusian crypto sector.
“Sanctions against the IT industry in Belarus will make the industry either Russia- or Poland-aligned, as enterprises will instantly vote with their feet.”
EU-led sanctions, Petrov added, would effectively force Belarus to pick a side, and could even see it attempt to align with China – which is also actively pursuing a glut of pro-blockchain business moves.