President Alexander Lukashenko has urged Belarusian banking leaders to expand the use of cryptocurrencies and modern digital payment systems as he believes the country’s outdated financial practices can no longer support its sanction-hit economy.

Doubling down on his newfound urgency, Lukashenko, during a meeting, told heads of Belarus’ central and commercial banks that digital tokens must play a larger role in cross-border payments and domestic financial operations, a report from Belarusian Telegraph Agency claimed.

Luashenko is of the opinion that cryptocurrencies may be the answer to combating the “unprecedented challenges” that the country’s economy has faced over the past five years.

Since 2020, countries like the EU, US, UK, and Canada have progressively imposed sweeping rounds of sanctions on Belarus, targeting key sectors such as finance, defense, energy, and transport.

“They waited for us to fall to our knees. But today we can say (perhaps even with confidence): we are not bankrupt, we have managed,” Lukashenki said.

Why is Belarus eyeing crypto?

Belarus, like many other sanction-riddled countries, is turning to cryptocurrencies as a workaround to restricted access to global banking systems and trade. Russia, for instance, has reportedly been exploring crypto-based settlement systems after it was cut off from major international financial rails in the wake of its invasion of Ukraine.

Cryptocurrency transactions have been legal in Belarus since 2018; as such, they remain a readily available option for citizens and businesses looking to bypass traditional banking hurdles.

According to Lukashenko, cryptocurrencies can help Belarus reduce its dependence on intermediaries, while also offering other benefits such as smart contract-powered automated transactions and offering users better control over their assets.

He also flagged that Belarusian crypto exchanges are “on track to possibly double in external payments by the end of the year,” and therefore urged banks to support what he called a period where “cryptocurrency-based transactions are more active than ever.”

“The government and the National Bank have been given corresponding instructions. Now, act.”

Belarus must fast-track crypto regulations

Lukashenko’s latest call came less than a week after he issued an ultimatum to his government, demanding cryptocurrency oversight mechanisms, as it was reported that nearly half of all funds sent by Belarusian investors to foreign crypto platforms fail to return.

He called for lawmakers to create “transparent rules of the game and mechanisms for control,” warning that the rate at which digital finance was expanding was outpacing existing laws and that failure to act could undermine both investor protection and national economic security.

Last year, Lukashenko passed a law that bans individuals from buying and selling crypto outside of domestic exchanges. He has also advocated for tapping into other avenues, including developing a state-backed cryptocurrency mining industry to take advantage of Belarus’ surplus electricity.