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Belarus drama: Why Lukashenko might rush into Bitcoin mining

Belarus drama: Why Lukashenko might rush into bitcoin mining

Vladislav Ginko, an author of this OP-ED story, is a former vice-rector of Moscow-based Jewish University. He worked as a Corporate Finance lecturer at New York-based Touro University. Currently, he is an analyst and lecturer at Russia’s leading state think-tank, Presidential Academy.


Belarus becomes an energy abundant country. Its leader, Alexander Lukashenko, favors Bitcoin mining and is ready to use cheap energy for it. Meanwhile, the tense Belarussian political situation casts a shadow on his plan whose implementation may concern the U.S. and China.

The acting ruler of Belarus, long-standing President Alexander Lukashenko, has appeared in the center of the biggest political crisis of this country. The opposition argues that the Presidential ballot voting that took place from 4th to 9th August has delivered at least controversial results.

The heads of Ukraine, Lithuania, Latvia, and Estonia have appealed to Lukashenko with a demand for new elections; he’s strongly rejected it while appearing at the meeting on 16th August in Minsk.

Meanwhile, any political tensions have roots in economic matters. Lukashenko has written himself in the world Bitcoin history as the first world country’s leader who has declared last year that he is into an idea of mining Bitcoins. 

Alexander Lukashenko talks on Bitcoin mining.

Ostrovets Nuclear Power Plant deal

This plan is hinging on the kick-off of Ostrovets Nuclear Power Plant (ONPP), the first one in Belarus. Russia has given a 25-year credit line of almost $10 billion covering almost 90% of expenses to build this plant. At the beginning of this project, the launching time was determined for the 2018 year (first unit of ONPP, 1,200-megawatt reactor) and 2019 for the second one. 

Lukashenko expressed Russia’s President Vladimir Putin his disappointment for this delay citing some allegedly “loss” this delay has inflicted on the Belarussian economy.

On 11th August this year ONPP started loading Russia’s uranium and will be ready to produce electricity starting from the end of this year. The second unit of ONPP is going to be built and put on stream in the mid-2022 but what’s certainly known is that Lithuania and Estonia are going to widen a group of countries that rejects any electricity import from ONPP. Meanwhile, the first line of ONPP became the first unit of the newest Gen 3+ built using Russian technologies abroad.

Anyway, with this boycott as well as world COVID-19 economic ramifications Belarus is going to be an energy abundant country. Such development has been envisioned by the political elite of Belarus that has in advance dropped an idea to export electricity to a number of neighboring countries and tilted towards Bitcoin mining as Lukashenko has hinted.

Lukashenko urges for “digitalization”

On the 4th of August Lukashenko made an address to the local parliament and stressed that he’d be keen to favor the development of “own payment services that would be independent of transnational ones” and praised the role of “new information technologies”. 

He’s been convinced that “digitalization” must be implemented at a faster pace. The Lukashenko’s Decree No. 8, “On the development of the digital economy”, has stipulated that in 2021-2023 years a number of commercial banks would participate in the pilot program of token emission.

The eagerness of Lukashenko to head the economy into Bitcoin mining looks like his personal plan to make Belarus one of the leading players in this niche. As Anthony Pompliano of Morgan Creek Capital stresses, “eventually every country will be mining and every country will be holding Bitcoin.”

Some signs in Iran hint that this country is also on the same way but we’ve not heard confirmation from the top person in Teheran yet. Iran as well as Belarus deliberates over the option to use Bitcoins to bypass current and coming U.S. sanctions.

At the same time, as Finbold.com has recently reported, the U.S. plans to play a bigger role in the Bitcoin sphere and to challenge Chinese dominance in Bitcoin mining. The appearance of Belarus with abundant cheap energy and the leader willing to explore Bitcoin mining opportunities for “to produce and sell them” looks like a possible game-changer and may provoke negative reaction and opposition from the U.S. and China. 

In the past, the most important word in global finance was “gold”, then it was replaced with the “U.S. dollar”. Both two look as artifacts of the past when Bitcoin has come on the scene.

More and more the current global politics look like a continuation of a competition over Bitcoins, and ongoing political developments in Belarus have many scenarios including ‘The Bitcoin’.

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Author

Vladislav Ginko is a former vice-rector of Moscow-based Jewish University. He worked as a Corporate Finance lecturer at New York-based Touro University. Currently, he is an analyst and lecturer at Russia’s leading state think-tank, Presidential Academy.