Belarus Set to Launch CBDC to Evade Sanctions
Belarus is planning to expedite the launch of its central bank digital currency (CBDC) in order to bypass US and EU sanctions and facilitate international trade for its businesses. President Alexander Lukashenko is expected to make a decision on the introduction of the CBDC soon. Belarus, like Russia, has faced economic sanctions due to the conflict in Ukraine, which has severely impacted its trade firms. In an effort to circumvent these sanctions, Belarus has been exploring the use of a digital ruble for several years and has recently intensified its efforts. The National Bank of the Republic of Belarus (NBRB) has highlighted the potential cross-border applications of the CBDC.
China Provides Support as Belarus Looks East
During a state visit to China, President Lukashenko received support from Chinese President Xi Jinping, who commended Belarus’ pivot towards the East and pledged strategic assistance. China itself is currently testing its own CBDC’s cross-border capabilities. This aligns with Belarus’ efforts to strengthen ties with its long-standing ally, Russia, which is also accelerating its CBDC pilots with a nationwide launch planned for 2025.
CBDC as a Solution for Trade or Crude Measures?
The digital ruble is seen as a potential solution for facilitating cross-border trade for Belarusian businesses affected by sanctions. However, until CBDC-powered trade becomes a reality, traders may have to resort to cash payments. The central bank has approved a law allowing exporters to make cash payments until the end of 2024. The launch of the CBDC could provide a more sophisticated and sustainable alternative for businesses in Belarus.
Hot Take: Belarus Embraces CBDC Amidst Sanctions
Belarus is taking a proactive approach to evade sanctions by accelerating the launch of its CBDC. By introducing a digital ruble, the country aims to provide its businesses with an alternative means of conducting international trade. This move aligns with similar efforts by Russia and China, who are also exploring the potential of CBDCs for cross-border transactions. While the launch of the CBDC could bring relief to Belarusian traders affected by sanctions, it remains to be seen how effective it will be in practice. Nevertheless, this strategic move showcases Belarus’ determination to overcome economic challenges and strengthen its position in the global market.
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