Belarus is actively pursuing the acceleration of its Central Bank Digital Currency (CBDC) launch, aiming to circumvent economic sanctions imposed by the US and the EU, enabling its firms to engage in international trade. President Alexander Lukashenko is expected to make a CBDC-related decision following a key meeting.
In the aftermath of the Ukraine war, Belarus, much like Moscow, has faced substantial economic sanctions, particularly affecting trade firms. Belarusian importers and exporters find themselves marginalised from the global banking network, prompting the search for alternatives to dollar transactions.
President Lukashenko’s recent state visit to China, where he met with Chinese President Xi Jinping, indicated an effort to strengthen ties and explore alternatives amid external interference concerns. China applauded Belarus’ pivot towards the East, promising “strategic support.”
Belarus has been exploring the issuance of a CBDC for years but intensified its efforts in August, emphasising “real-world” testing. The National Bank of the Republic of Belarus (NBRB) has highlighted the digital Belarusian ruble’s potential for cross-border transactions, presenting it as a mechanism to help businesses overcome sanctions.
Dmitry Kalechits, NRBR Deputy Chairman, emphasised the CBDC as a “most significant large-scale project” with the potential for cross-border use. The NRBR envisions the digital Belarusian ruble as particularly valuable in the cross-border payments space.
The NBRB considers the CBDC a legal tender equivalent to physical currency. Dmitry Kalechits clarified that the digital ruble would be issued by the central bank and maintain the same value as its physical counterpart. Pavel Kallaur, the bank’s Governor, previously mentioned plans for a CBDC experiment involving both banks and individuals.
Moscow, Belarus’ longstanding ally, is also expediting its CBDC pilots, with a nationwide launch planned for 2025. Russian politicians foresee the digital ruble’s role in international trade. Despite these ambitions, Belarusian traders may resort to temporary measures, such as making cash payments until the end of 2024, as approved by the central bank.
Belarus appears inclined to align its CBDC plans with Moscow’s, particularly in response to Russia’s active pursuit of a digital ruble. Settlements with the digital ruble are proposed to be classified as non-cash payments, mirroring Russia’s CBDC legislation. Minsk’s proactive approach contrasts with Moscow’s exploration of a China-style crypto ban, as Belarus actively seeks to attract crypto firms through initiatives like the Hi-Tech Park. The country’s commitment to a CBDC launch is underscored by President Lukashenko and the NRBR’s pledge to reach a decision by the end of the year.