Lawmakers in Costa Rica are working to make the Central American country a Bitcoin-friendly nation, with significantly lower taxes on crypto.
This week, Costa Rican lawmaker Johana Obando presented a bill to Congress for regulating the crypto market in the Central American country.
Obando, who now has a laser eyes meme on her Twitter page, said 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—but in “perfect harmony” with it.
El día de mañana estaré presentando un proyecto de ley para otorgar seguridad jurídica a las empresas Fintech y similares de Costa Rica y promover la economía digital y el uso de criptoactivos. #MECA #Criptomonedas #Criptoactivos pic.twitter.com/AY8OqYpAZr
— Johana Obando (@JohanaDiputada) October 23, 2022
The idea 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.
Presented along with Congressmen Luis Diego Vargas and Jorge Dengo, the bill would not allow the government to tax cryptocurrencies when used to buy goods. It also 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, either. Profits from crypto trading, however, would be subject to income taxes under the bill.
In short, the lawmakers want the Costa Rican government to recognize what crypto is and allow people to hold it and largely spend it freely. This, Obando said on Twitter, would eventually attract foreign investors, fintech companies, and create jobs for Costa Ricans.
But Obando made it very clear that the law would be 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,” Obando said on Twitter. “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, which he claims he buys on a whim, naked on his phone.)
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 (DAOs)—but the 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.