Costa Rican lawmakers are working to make the country a Bitcoin-friendly nation and have proposed to significantly lower taxes on cryptocurrencies.
Costa Rican lawmaker Johana Obando this week presented a bill to Congress regarding the regulation of the cryptocurrency market in the Central American nation. The bill, dubbed the Cryptoassets Market Law (MECA), was introduced with the support of congressmen Luis Diego Vargas and Jorge Dengo and according to Obando’s tweet (translated) will “promote the digital economy and the use of crypto assets.” MECA would “give protection to individual virtual private property, to the self-custody of crypto-assets and to decentralization” without the intervention of the Costa Rican central bank, but instead in “perfect harmony” with it. The bill also prevents the government from taxing cryptocurrencies while it is in cold storage and additionally exempts mined cryptocurrency from profit tax. The bill does however impose taxes on profits obtained from crypto trading.
Further, the bill defines Bitcoin and other cryptocurrencies as virtual private currencies and thereby safeguards the ownership of such assets. The bill was introduced with the hopes of drawing more capital into the country by incentivizing investors with added certainty and security in the crypto asset space. What lawmakers are essentially trying to do is to ensure that the Costa Rican government recognise what cryptocurrencies are and allow people to hold them and largely spend them freely. Obando made it clear that the bill does not compel anyone to accept Bitcoin as payment for debts and products, but rather, simply legalizes the act of doing so should both parties to a transaction agree on its utilization. It needs to be made clear that the development in Costa Rica should not be confused with that of El Salvador, which accepts Bitcoin as a “legal tender.”
Obando adds that the bill guarantees “banking interoperability of cryptocurrencies through public and private banks in the national territory.” This implies that banks may act as custody and wallet providers and may even act as cryptocurrency exchanges.
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