A Belarusian chemicals giant looks set to turn to crypto in a bid to circumvent sanctions placed on businesses in the country by the international community.
The United States and the EU imposed a range of sanctions on the state in early summer, with governments in Canada, the UK, and Switzerland following suit. This has left many of the nation’s biggest businesses in limbo – freezing them out of trade deals involving conventional financial channels like payments networks and banks.
But, per an article on its website, Grodno-Azot explained that Dmitry Goroshko, its Director-General for Economics and Finance, had been “instructed to work out the issue of the possibility of making payments in cryptocurrency in order to build a modern digital economy at the enterprise.”
The company noted:
“Cryptocurrencies were legalized in Belarus in 2017 after the Head of State Alexander Lukashenko issued [a decree] on the digital economy.”
Lukashenko, also known as the last dictator in Europe, is not recognized as a legitimate president by the international community.
Grodno-Azot, based in the city of Grodno, is a state-run nitrogen compounds and fertilizers producer. But its activities have been blighted by sanctions on-and-off since 2006. Although many of these were eased in 2015, these have now returned in force after disputed elections in 2020 saw violence break out of the streets of the capital Minsk.
Grodno-Azot did not go into details regarding its crypto-related plans, but other nations have previously taken similar approaches. The government of Venezuela, another country that has been hit with international community sanctions, has thrown itself headfirst into a crypto-powered trading initiative, a fact that has led its government to reportedly accrue a large stash of bitcoin (BTC) and ethereum (ETH) holdings.
But even within Belarus, some appear unsure about Grodno-Azot’s chances of success with its new crypto policies.
In a report from Telegraf, Vadim Iosub, a senior analyst at the forex broker Alpari Eurasia remarked that there was “no question of paying for goods, receiving payment for their products or paying workers’ salaries.”
Iosub conceded that while sanctions from “European nations and the United States” would “complicate payments made in dollars and euros” – the largest currencies used in international trade – such countries “do not control payments in cryptocurrencies.”
However, the analyst stated that there was a very big “but” to add at this juncture.
“To pay with crypto, suppliers and buyers must agree. And no one in the world will agree to this. As such, this is a naive and clumsy attempt.”
And Iosub noted that for the project to “work,” a great deal of legislation would “need to be rewritten, starting with the civil code.” Even if the government was minded to help out, “there is years of work to be done here,” he concluded.
But if sanctions continue to mount on the ruling regime, Minsk may choose to do just that. The nation has turned to crypto to help boost its economy in the past. And as relations with Western Europe and the USA continue to sour, Lukashenko could well look to follow the Venezuelan lead.
– Russia’s Foreign Minister: Crypto Will Inevitably Play Role in Int’l Trade
– Russia Could Use Crypto to Dodge US Sanctions – Political Insider