Costa Rican lawmakers are working to make the country a Bitcoin-friendly nation, with significantly lower taxes on crypto. They presented a bill to the National Congress for regulating the crypto market.
They say that the Cryptoassets Market Law (MECA) would “give protection to individual virtual private property, to the self-custody of crypto-assets and to decentralization” without interference from the country’s central bank, in “perfect harmony” with it.
The goal is to have a law that recognizes what digital assets are and allow those who want to buy, sell, spend and store their crypto do so, without interference from the Costa Rican government.
The proposed bill would not allow the government to tax cryptocurrencies when used to buy goods. Also it wouldn’t let the government tax crypto sitting in cold storage and crypto produced by the mining industry wouldn’t be subject to profit tax. Profits from crypto trading, however, would be subject to income taxes.
Officially recognizing Cryptocurrency
The lawmakers want the Costa Rican government to recognize what crypto is and allow people to hold it and largely spend it freely. This would eventually attract foreign investors, fintech companies, and create jobs for Costa Ricans.
Different from El Salvador’s Bitcoin Law
In El Salvador, Bitcoin is legal tender, meaning businesses must accept it if they have the technological means to do so. “Does this bill propose the same as El Salvador? Absolutely not,” Lawmaker Obando said. “MECA introduces cryptocurrencies as a private virtual currency, of free access and circulation, and does not oblige the State to acquire or replace them.”
El Salvador became the first country in the world to adopt Bitcoin as legal tender. But the Central American nation’s president, Nayib Bukele, has been criticized for the law (and his personal investments in cryptocurrency).
Similar to Panama
The Costan Rican bill is similar to the one presented in Panama earlier this year: the so-called Crypto Law wanted to regulate the use of Bitcoin and legalize decentralized autonomous organizations, but that country’s president vetoed it.
Elsewhere in Latin America, Paraguay is working to draw up clear regulations for the Bitcoin mining industry, and Chile’s senate this month approved a fintech bill which hopes to regulate the crypto industry.