A Belarusian chemical giant is likely to turn to crypto to circumvent the international community’s sanctions against companies in the country.
The US and EU imposed a series of sanctions on the state in early summer, followed by governments in Canada, the UK and Switzerland. This has left many of the country’s largest corporations in limbo – they have been banned from trade deals with conventional financial channels like payment networks and banks.
But according to an article on his website, Grodno-Azot stated that Dmitry Goroshko, its general director for economy and finance, was “tasked with the question of working out the possibility of payments in cryptocurrency in order to build a modern digital economy in the company”.
The company noted:
“Cryptocurrencies were legalized in Belarus in 2017 after the head of state Alexander Lukashenko issued it [a decree] to 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 Grodno, is a state-owned manufacturer of nitrogen compounds and fertilizers. But since 2006 his activities have been overshadowed by sanctions again and again. Although many of them were relaxed in 2015, they came back into force after controversial elections in 2020 when violence broke out on the streets of the capital Minsk.
Grodno-Azot did not go into details on its crypto-related plans, but other nations have previously taken similar approaches. The government of Venezuela, another country hit by international community sanctions, has plunged headlong into a crypto-based trading initiative, a fact that has resulted in their government reportedly holding a large stash of Bitcoin (BTC) and Ethereum (ETH.) Has amassed) holdings.
But even in Belarus, some seem unsure about the chances of success for Grodno-Azot with its new crypto policy.
In a report by Telegraf, says Vadim Iosub, a senior analyst at the forex broker Alpari Eurasia noted that “there is no question of paying for goods, receiving payment for their products, or paying workers’ salaries”.
Iosub acknowledged that while sanctions by “European nations and the United States” “make payments in dollars and euros more difficult” – the largest currencies used in international trade – these countries “do not control payments in cryptocurrencies”.
However, the analyst stated that there was a very large “but” to be added at this point.
“In order to pay with crypto, suppliers and buyers have to agree. And nobody in the world will agree with that. Therefore this is a naive and clumsy attempt. “
And Iosub noted that in order for the project to “work”, many laws would have to be “rewritten, starting with the Civil Code”. Even if the government wanted to help, “there has been years of work here,” he concluded.
But if the sanctions against the ruling regime continue to increase, Minsk could do just that. The nation has turned to crypto in the past to boost its economy. And since relations with Western Europe and the USA continue to deteriorate, Lukashenko could well try to follow the Venezuelan example.
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– State-owned Belarusbank launches crypto exchange amid sanctions against Lukashenko