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The government of Belarus has announced plans to work on a new legislative bill to ban the transfer of cryptocurrencies among individuals. This move comes as a last resort to combat rising crypto crime rates.
Depth Insights on Upcoming Anti-Peer-to-Peer Bill
Since the beginning of 2023, Belarusian prosecutors have clamped down on 27 illegal crypto trades between individuals.
From this illicit activity, these bad actors have traded over 22 million Belarusian rubles (about $8.7 million). The Belarus government is now fighting back.
The Republic of Belarus Ministry of Foreign Affairs (MFA) stated in an official public release on Telegram that a new legal framework would be implemented soon.
The bill will prohibit peer-to-peer (P2P) cryptocurrency transactions for individuals.
The ministerial department emphasized that this action aims to address the prevalent issue of crypto crime and end the withdrawal of funds obtained through illicit and criminal activities.
Peer-to-peer services are in demand among criminals who convert stolen cash into crypto assets and transfer them to criminal schemes, organizers, and participants.
The new bill would see the MFA forbid Belarusian residents from engaging in P2P crypto transactions.
However, only the trade and exchange of crypto assets will be permitted through reputable exchanges registered with Belarus Hi-Tech Park (HTP) to eradicate illicit activities.
The HTP is a tax and legal regime in Belarus that helps to facilitate the innovative development of information technology (IT) and supervise the operations of new platforms such as trading exchanges.
MFA Ban Runs Counter To Recent Belarus “Friendly” Crypto Policies
The current plan by the Belarus Ministry of Foreign Affairs (MFA) to prohibit peer-to-peer (P2P) services contradicts the country’s previous law on the free circulation of cryptocurrencies.
On February 14, 2022, President Alexander Lukashenko strengthened the country’s crypto relations by signing a decree named “On the register of virtual wallet addresses and circulation of cryptocurrency.”
The decree was a formal affirmation of support for the unrestricted circulation of cryptocurrencies, particularly Bitcoin (BTC), within the country.
However, the upcoming legislation proposed by the MFA may undermine the initial goal of President Alexander.
P2P services facilitate seamless and private exchanges, allowing traders to instantly convert cryptocurrencies like BTC into cash.
Unfortunately, illicit P2P transactions have caused significant harm, tarnishing Belarus’ regulatory landscape.
Nevertheless, not everyone has embraced this new development. In response to the news, a Twitter user expressed skepticism about the MFA’s ability to effectively regulate P2P trades.
Belarus is working on an amendment to its crypto regulations that would ban the exchange of cryptocurrencies between individuals.
Crypto transactions will only be possible through the exchanges for “transparency and control purposes.
Good luck enforcing it
— Peter Kallos (@PeterKallos2017) July 2, 2023
Others have highlighted that it contradicts the fundamental principles of the decentralized economy championed by the introduction of Bitcoin over a decade ago.
Therefore, the ban on the popular transaction channel would create a controlled crypto market where registered exchanges in Belarus can scrutinize every transaction.
While the legal bill is geared towards curbing the prevalence of crypto cybercrime and illegal trading activities, there are uncertainties over how the Republic of Belarus would enforce the new law.
This is because the crypto market is decentralized, making it difficult for authorities to track the use of P2P services by the citizens of Belarus.
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