The Belarusian Ministry of Foreign Affairs (MFA) has announced plans to prohibit Peer-to-Peer (P2P) cryptocurrency transactions for individuals. Citing a high rate of cybercrime in the country, the MFA noted that local prosecutors have already suppressed the activity of 27 citizens providing “illegal crypto exchange services” since the beginning of 2021, with total illegal revenues amounting to nearly 22 million Belarusian rubles ($8.7 million).
The Ministry argued that P2P services are popular among fraudsters who use them to cash out and convert stolen funds, as well as transfer money to criminal schemes. To address this issue, the MFA plans to prohibit individuals from using P2P, and will only allow them to exchange crypto via exchanges registered with Belarus Hi-Tech Park (HTP). The regulator stated:
“The MFA is working on legislative innovations that prohibit crypto exchange transactions between individuals. For transparency and control, citizens will be allowed to conduct such financial transactions only through the HTP exchanges.”
In addition, the MFA plans to implement a practice similar to the procedure for exchanging foreign currencies, which should make it “impossible to withdraw money obtained from illegal activity.” They further suggested that this will make it unprofitable for criminals to operate in Belarus.
However, many cryptocurrency enthusiasts have questioned the government’s ability to ban P2P cryptocurrency trading, with one crypto observer on Twitter commenting, “Good luck enforcing it.” P2P exchange was the original idea of Bitcoin, as written by its anonymous creator Satoshi Nakamoto, and it may not be an easy task for the government to effectively enforce this ban, given that many users in China still use P2P channels to exchange their crypto despite the country’s ban on all crypto transactions for users.
This news is somewhat contrary to legislation Belarus has passed in recent years. In 2022, Belarusian President Alexander Lukashenko signed a decree affirming the country’s formal support of free circulation of cryptocurrencies like Bitcoin.
