The state-owned bank of Belarus, Europe’s most authoritarian country but equally one of the friendliest toward cryptocurrencies, this week launched a cryptocurrency exchange, per local media outlet PrimePress.
The exchange, a partnership between Belarusbank and White Bird, a local cryptocurrency firm, lets Belarusians and Russians buy Bitcoin with a Visa payment card.
The launch is the latest signal that the Belarusian government welcomes crypto—but whereas the government once used crypto to charm tech workers to the country two years ago, unrest in the post-Soviet nation may drown out its "open for business" messaging.
Belarus's crypto play started in 2018, when the government legalized cryptocurrency trading and granted tax exemptions to individuals and businesses.
It was part of a viral marketing campaign to entice tech companies to set up shop in the country with the promise that it would leave them alone—with much success.
In 2019, the latest year of statistics, Belarus had 1,500 tech companies, accounting for 5.7% of the Belarusian GDP and 50% of its growth last year.
However, many tech workers fled the nation after violent protests broke out this summer when Alexander Lukashenko, Belarus’s president, sought a sixth term in office.
Lukashenko was secretly sworn in late September; protests continue.
“There are now reports of most software companies moving their operations to Russia, and with that, many engineers relocating to either Russia, Ukraine, or the Baltic states,” Filip Rambousek, a London-based political analyst of Eastern Europe, told Decrypt.
PandaDoc, a large documentation automation firm, had four of its managers in Minsk jailed for supporting the protests. Later, the company conducted an internal survey and found that 8 in 10 of its employees, many Belarusians, simply wanted to leave the country. The office has now relocated to Ukraine.
The protests, and the government’s brutal response to them, knocked out the country’s tech industry. Many of the tech sector workers, generally sympathetic to the anti-Lukashenko movement, are now gone.
“The software industry is the only sector that had actually prospered under Lukashenko, and it’s now collapsed,” Rambousek told Decrypt.
Tech has become the country's major export; last year, its tech industry was worth $2 billion.
Joe Mooney, a Russia and former Soviet Union analyst at the London-based corporate investigations firm C&F Partners, told Decrypt, "Tech is the only industry in Belarus that is largely left alone by the government," and that it prospered as a result.
In August, more than 2,500 tech CEOs, developers, and investors signed a petition in support of the protests and raised alarm bells about the future of tech in the country.
In #Minsk, #Belarus, workers of IT sector firms in the Minsk High Tech park joined a labour strike in #protest against election rigging and police brutality:pic.twitter.com/G7hK2Hlb9D
— Alex Kokcharov (@AlexKokcharov) August 14, 2020
Mooney said, “The state's partnership in this venture may indicate plans to increasingly interfere in this sector of the economy in light of tech businesses' support for recent protests, but also an awareness that the country's economic development depends on growth and innovation in this area.”
Charming them back with crypto might not work anymore.