Costa Rica is one of the very few places in the world where it’s legal for employers to pay their employees with cryptocurrency. Because of this, various commentators call Costa Rica the “crypto haven.” However, even if cryptocurrency wages are legal, employees still have to pay for their social security based on crypto’s current and volatile value.
Nevertheless, this is proof that crypto is legally allowed and widely used in Costa Rica. It’s no doubt that crypto trading is prominent in the country, unlike in other parts of Latin America. Continue reading for more details on the topic.
Trading Digital Assets in Costa Rica
Since not all Costa Ricans are getting paid in crypto, the easiest way for them to access Bitcoin and other digital currencies is through exchange platforms. Numerous exchanges in Costa Rica offer different features, security measures, payment options, withdrawal limits, and verification procedures.
In addition to exchanges, Costa Rican traders also need crypto wallets for their funds. There are three main types of crypto wallets supported here:
- Hardware wallet – physical storage like hard drives
- Software wallet – online (desktop or mobile) applications
- Cold storage – paper wallets (mainly used for backups)
Costa Rican Cryptos
One of the most popular cryptocurrencies that’s steadily growing in use in Costa Rica is Tether. It’s a stablecoin whose value is always equal to $1. Nevertheless, there are slight fluctuations in price, which is why many investors monitor the Tether price chart.
There are currently two big blockchain technologies that originated in Costa Rica: EOS and Nimiq. These two encourage other startups to get into the crypto business. As a result, these two are now considered local crypto assets in Latin America.
EOS Costa Rica
EOS Costa Rica is a blockchain infrastructure provider. It’s been operating for a while and is a tight competitor of Ethereum in terms of its locality – the reason why it’s dubbed the “Ethereum killer.”
EOS Costa Rica has 30 block producers that create and maintain infrastructures required for running the blockchain. The company has the following goals:
- Become transparent in using block rewards;
- Fund and secure any investment requirements to run a competitive EOS block producer;
- Defend the EOS constitution;
- Become politically neutral while being part of blockchain governance discussion.
Nimiq is a blockchain technology that aims to lower crypto adoption barriers and make cryptocurrencies accessible for everyone. The company behind Nimiq designed a payment system that uses a browser-based blockchain and aims for simplicity.
The crypto is inspired by Bitcoin but designed to run on browsers. It can be used without downloading any applications while providing fast, simple, and secure payments.
Benefits of Crypto Trading Costa Rica
Most blockchain technologies offer the following benefits:
Blockchain technologies register every transaction in a systematic and chronological order to improve transparency. This enables better traceability of data. Also, the data registered in the system can’t be altered, which offers high transparency.
Blockchain technologies use smart contracts. These smart contracts can execute automatically, thereby cutting middleman and transaction costs.
Blockchain technology uses advanced layers of privacy and security for data registration. It is decentralized, minimizing the threats of cyberattacks.
Since the Costa Rican government does not hinder the growth of blockchain technologies in the country, this means that cryptocurrency firms can thrive in it.
How to Trade Cryptocurrencies in Costa Rica
Let’s take EOS and Nimiq as examples. Here’s a brief guide on how to buy, sell, and exchange these coins:
- Join an exchange platform and get a crypto wallet.
- Purchase globally recognized crypto first, like Bitcoin or Tether. You can transfer this to your wallet in the meantime.
- Go to an exchange where EOS and Nimiq are offered.
- Deposit your purchased BTC or USDT.
- Go to the Exchange section on the platform.
- Choose EOS or Nimiq.
- Complete an exchange or buy order. Enter the amount of coins you want to trade.
- Once you receive EOS or Nimiq, withdraw it to a compatible crypto wallet.
Status of Cryptocurrency in Costa Rica
Crypto is widely used in Costa Rica for two primary purposes: as payment and as an asset. The most popular cryptocurrency pair in the country is BTC/CRC or Bitcoin and Colón (₡), the national currency of Costa Rica. Costa Rica’s citizens prefer this pair because of its fair volatility and consistency in fluctuation.
Crypto in Costa Rica: Present
The government of Costa Rica still refuses to accept crypto as a monetary currency, but it legalized its use. The Central Bank of Costa Rica (CBCR) also doesn’t consider cryptocurrency a legal tender. The Central Bank constantly warns the people about the financial risks of these digital currencies. Cryptocurrencies are even regarded as “quasi-money” under Costa Rican law.
Crypto in Costa Rica: Future
We’ve mentioned various exchange platforms, yet there are currently three crypto-friendly ATMs in Costa Rica that allow the purchase of crypto using cash. The next thing that contributes to cryptocurrency’s growing popularity is that the country also has one of the most significant renewable energy outputs worldwide. Its abundance of electricity makes it a good place for mining crypto and trading, which uses high energy consumption.
Another promising factor in Costa Rica is that traders can buy crypto without paying capital gains tax. Still, traders who use crypto for business need to check if their funds are subject to revenue tax.
Costa Rica has a high cryptocurrency adoption rate and a rapidly growing crypto community. Because the government doesn’t ban blockchain or cryptocurrencies, it attracts more options for aspiring traders. Make sure you do your research before any trading decision!