Days before legalizing crypto activities, Belarus has adopted a new accounting standard that deals with cryptocurrencies. It classifies digital tokens according to their acquisition and intended use. The document defines the information companies will be required to share with authorities. The presidential decree regulating the crypto sector comes into force on March 28.
Goods, Investments, Settlements
The Ministry of Finance in Minsk has developed a new standard that specifies the procedures for keeping accounting records of crypto transactions. The document does not explicitly mention cryptocurrencies, which are not regarded as legal tender in Belarus. Nevertheless, it effectively regulates the reporting of cryptocurrency flows.
The obligations of organizations conducting token sales and the exact approaches to assessing the cost of “digital tokens” are also defined in the Ministry’s decree. The rules apply to private entities and not the state-owned banks or government institutions, the department clarified in an announcement quoted by Belta news agency.
The new standard classifies cryptos according to their acquisition and their intended use. Tokens acquired through initial coin offerings (ICOs) are referred to as investments. They should be debited as either “Long-term financial investments”, if their circulation period exceeds 12 months, or as “Short-term financial investments”. Their amounts must be credited in the accounting balance under “Settlements with different debtors and creditors” and “Other income and expenses”.
If the tokens are purchased for subsequent sale, by a trader or an exchange, they have to be reported in the “Goods” debit account and under the following credit accounts: “Settlements with suppliers and contractors” and “Income and expenses for current activities”. Digital tokens acquired as a result of mining operations or as remuneration for verification of crypto transactions are to be recorded under the “Finished goods” debit account and also as “Main activities” in the credit section of the balance.
Other Regulations Changed
Amendments have been made to several other standards of the National Chart of Accounts. These concern the individual accounting statements and the consolidated financial statements. The Finance Ministry has determined the data companies working with tokens are required to disclose in their accounting records. The information should include the amount and type of tokens in possession, as well as their initial value as calculated at the end of the previous year.
Decree №8 “On the development of the digital economy” was signed by President Alexander Lukashenko in December. It legalizes crypto activities, creating conditions for exchange services, initial coin offerings, and cryptocurrency mining operations. The document introduces tax breaks and other incentives for crypto businesses until 2023. It will come into force on March 28, 2018.
With its implementation, Belarus is set to become arguably the first jurisdiction with a comprehensive legal framework regulating the blockchain industry. The decree does not imply restrictions or any special requirements for issuing, placement, storage, and exchange of digital tokens.
Individual entrepreneurs and corporate entities will be free to do crypto business in the country provided they register as residents of the Belarus High Technology Park (HTP). At the same time, the use of cryptocurrencies is expected to remain somewhat limited, as they will not be accepted as legal means of payment.
Do you think that the legal status of cryptocurrencies in Belarus will change in the future? Share your expectations in the comments section below.
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Author: Lubomir Tassev