Belarus has launched the first licensed and regulated cryptocurrency exchange in the Commonwealth of Independent States (CIS).
The project currency.com was registered as part of the High Technologies Park (HTP) – a special economic zone which Belarusian President Alexander Lukashenko established through the Decree on Development of Digital Economy.
The HTP zone effectively has the status of a Belarusian IT offshore haven, with special tax concessions, elements of British law, and its own regulation.
According to TASS, the exchange will release more than 10,000 tokenized assets, with each token linked to a traditional financial instrument – shares, indexes, natural resources.
Quotes for the tokens will be provided by the investment company Capital.com, which belongs to Viktor Prokopenya and the Gutseriev family.
Users will be able to buy the tokens using both cryptocurrencies such as Bitcoin and Ethereum and with fiat currencies. The platform will also offer users the choice to use leverage.
Although “tokenized assets” are presented as an innovation, in actual fact they are nothing other than the CFDs (contracts for difference) linked to base assets that are well-known to financial market participants, said Vadim Iosub, a senior analyst at the Alpari information analysis center.
Cyprus-based Capital.com will play the well-known role in the forex market of providing liquidity.
In its business plan, the new exchange expects to acquire $70 million in commission profit with $10 million in total investments by the end of the year. “This kind of project would have had undoubted commercial success had it started operating in 2017, at the peak of the cryptocurrency hype. Now the interest in cryptocurrencies has significantly fallen due to the sixfold decline in cryptocurrencies’ market capitalization from its peak in December 2017,” Iosub observes.
“Belarus’s internal market, due to its scale, is unlikely to be of interest to this kind of project. But serious entry into the international market could be complicated by difficulties with transferring money from outside to the company and from the company outwards through banks and the international payment system,” the expert continues. “These and others consider transactions with cryptocurrencies to be operations with increased risk, and even licensing the cryptocurrency exchange as part of the Belarusian IT-offshore will not be an indulgence which removes all the difficulties of moving money when depositing or withdrawing funds.”