Belarusian President Alexander Lukashenko has instructed the nation’s banks to expand their use of digital assets as a tool to blunt the impact of Western sanctions. He told senior bankers that external crypto payments totaled $1.7 billion in the first seven months of the year and could reach $3 billion by December.
At a meeting with officials from the National Bank and heads of top commercial banks, Lukashenko pressed for wider use of tokenization in finance. He highlighted potential benefits such as minimizing intermediaries, automating settlements through smart contracts, and giving users greater control over assets. “Digitalization here is not for the sake of digitalization, but for real economic effect,” he said in a rough translation of the official transcript.
The push in Minsk mirrors developments elsewhere in the region, where Russia-aligned states have seen rapid crypto growth linked to sanctions avoidance. Reports from blockchain intelligence firms trace activity to networks tied to the shuttered Russian exchange Garantex and show that some platforms in nearby countries have functioned like shell operators. For example, Kyrgyzstan’s reported crypto volumes reached about $4.2 billion by mid-2024 — largely driven by demand from Russian users, not local adoption.
Belarus itself faces sweeping European Union sanctions dating back to disputed 2020 elections and its role in Russia’s war in Ukraine. Current measures cover roughly 310 individuals and 46 entities, and include travel bans, asset freezes and funding restrictions that have been extended through February 2026.
Risk considerations are immediate: increased crypto usage can help sustain external payments, but it also raises compliance, anti-money‑laundering and reputational risks for banks that facilitate cross-border flows tied to sanctioned actors. Regulators and institutions will need clearer rules and stronger monitoring if tokenization is to deliver the benefits Lukashenko describes without worsening legal exposure.
Source: Decrypt. Read the original coverage for full details.