A new Costa Rican bill would exempt bitcoin transactions from taxes

Key Takeaways:

  • A Costa Rican lawmaker has proposed legislation to regulate Bitcoin use.
  • Banks would be able to offer cryptocurrency services owing  to the new proposal..

Johana Obando, a congresswoman from Costa Rica, put forth the “Cryptoassets Market Law (MECA)” bill, which would regulate and recognise cryptocurrencies in the Central American nation.

Additionally, the bill will permit the nation’s conventional banking institutions to collaborate with platforms that facilitate the use of cryptocurrencies, such as wallet platforms and custodians for national cryptocurrency reserves. This legislation aims to increase investment in this sector by providing clarity and protective measures to individuals and businesses that invest in crypto assets.

The bill, number 23,415, also serves to protect citizens’ rights to own cryptocurrencies like bitcoin by defining them as forms of virtual private currency.

Obando explained on Twitter that the bill aims to provide clarity to fintech businesses, promoting the expansion of the digital economy and the uptake of cryptoassets. She added that she thought the bill would give Costa Ricans more employment opportunities and make it more attractive to foreign investors and fintech firms.

Neighboring Countries like Panama have already  begun their journey of moving ahead with the acceptance of cryptocurrencies.This suggests a chance that the advent of bitcoin by the Nayib Bukele government spread to the adjacent nations.

Furthermore, Obando stated that the bill does not coerce anyone to recognise bitcoin as payment for debts or products; somewhat more, it plainly legalises the conduct if the parties involved in a transaction agree to use it.

Costa Rica differs from countries such as El Salvador in terms of regulation, having accepted cryptocurrency as legal tender. Bitcoin is legal tender in El Salvador, which means that businesses must accept it if they have the technical capacity to do so.

In a nutshell, the lawmakers want the Costa Rican government to support cryptocurrency and permit people to freely hold and spend it.

If bitcoin secures a  legal tender in Costa Rica, it will be the third nation in the world to do so, following El Salvador and the Central African Republic.

Additionally, the bill would prohibit the government from taxing cryptocurrencies when they are used to purchase goods. It would also explicitly forbid the government from taxing crypto in cold storage. 

Crypto generated by the mining industry would not be subject to profit taxation. Profits from cryptocurrency trading, on the other hand, would be subject to income taxes under the bill.

In an interview with local television, Obando stated:

“The cryptocurrency asset market is still in its infancy. This bill proposes Costa Rica as an investment centre for crypto-related individuals and businesses who see Costa Rica as a growth niche.”

Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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