Today Belarus officially joined the race to become an international center for blockchain innovation, when its crypto tax and accountancy laws were enacted.
Under the presidential decree all crypto-related business and trading will be legalized, a framework for accounting standards defined and a tax break until 2023 for profit and revenue derived from the industry will come into effect.
The nation of 9 million has joined the ranks of Estonia, Liechtenstein, Switzerland, Singapore and Malta, in a push to establish their country as part of a new digital economy which favors innovation over regulation in the frontier crypto industry. Interestingly, all these are very small nations with tiny populations and compared to the least crypto-friendly countries, the behemoths of Russia, China, India and arguably the US, they have a different set of priorities when it comes to generating national employment.
Nor are any of them vying to become the next world reserve currency.
President of Belarus Alexander Lukashenko.
What is Belarus’ new crypto accounting standard?
Arguably Belarus may be the first country to develop a comprehensive governance framework the crypto-blockchain industry.
In the new regime, tokens acquired through ICOs are referred to as investments. They should be debited as either “Long-term financial investments”, if their circulation period exceeds 12 months, or as “Short-term financial investments”. Their amounts must be credited in the accounting balance under “Settlements with different debtors and creditors” and “Other income and expenses”.
If the tokens are purchased for subsequent sale, by a trader or an exchange, they have to be reported in the “Goods” debit account and under the following credit accounts: “Settlements with suppliers and contractors” and “Income and expenses for current activities”. Digital tokens acquired as a result of mining operations or as remuneration for verification of crypto transactions are to be recorded under the “Finished goods” debit account and also as “Main activities” in the credit section of the balance.
The new framework brings to life the “Digital Economy Growth” plan that Belarusian President Alexander Lukashenko signed last December and is also part of a broader push to create a “blockchain Silicon Valley” in the Hi-Tech Park in the Belarus capital Minsk.
Michael is an editor at CurrencyTimes, with a background in energy and economics. He keeps an eye on Blockchain's applications in building smarter and more equitable energy access globally.