Belarus Breaks Chains by Launching Blockchain CBDC to Sidestep Sanctions

Minsk, Belarus, Wednesday, February 14, 2024 – The central bank of Belarus, the National Bank of Belarus (NBB), confirmed plans to launch a blockchain-powered central bank digital currency (CBDC), the “digital Belarusian ruble (DBR),” by 2026. ¹

The move comes amidst ongoing economic constraints following Western sanctions imposed due to the Ukraine war.

However, analysts caution that its effectiveness in circumventing sanctions remains uncertain, emphasizing the need for international cooperation and clear regulations regarding CBDC use.

Utilizing the Hyperledger Fabric platform, the DBR employs blockchain technology and smart contracts to bolster security and transparency.

The NBB emphasizes a range of advantages, such as enhanced accessibility and making participation easier for both businesses and individuals.

Additionally, the DBR aims to streamline domestic financial operations, ensuring more straightforward transactions. It also holds the potential to facilitate international trade, allowing collaboration with allies such as Russia and Kazakhstan.

This could lead to the establishment of a network of interoperable Central Bank Digital Currencies (CBDCs), providing an alternative to conventional systems.

Moreover, the DBR contributes to economic development by reducing barriers for new market entrants and fostering innovation through the implementation of smart contracts.

While the NBB doesn’t explicitly mention sanctions as a driver, analysts see the DBR as a potential tool to facilitate trade with allies and reduce reliance on traditional financial systems potentially impacted by sanctions.

Belarus joins a growing list of countries exploring CBDCs, following similar initiatives in China and Russia.

The Bank of Russia, for example, is currently testing its own digital ruble.

However, concerns remain regarding privacy, security, and potential disruption to existing financial systems.

The NBB is expected to release further details regarding the DBR’s functionalities and rollout schedule throughout 2024.

Sources