New Costa Rica Crypto Law May Eliminate Almost All Taxes on Virtual Currencies

Costa Rica authorities want to make a Bitcoin-friendly nation.
Lawmaker Johana Obando will present a bill that may eliminate all taxes on crypto.
CAR and El Salvador have already accepted Bitcoin as the nation’s legal tender.

Bitcoin May Roam Tax Free in Costa Rica

In November 2021, South American nation El Salvador accepted Bitcoin as its legal currency. Now Costa Rica has started to put efforts in a similar initiative. Johana Obando, a Central American lawmaker, will present a crypto bill to regulate the virtual asset sector in the nation. The regulator took to Twitter to announce the initiative.

She explained the crypto asset market law (MECA) in another Twitter thread. The regulator says that we are trying to regulate something that should remain unregulated, pointing towards the decentralized nature of the crypto assets. Virtual currencies do not fall under any rules and regulations globally, rendering them a risky asset in the eyes of governments.

¿Por qué “regular” algo que debe permanecer desregulado? Los Gobiernos en el mundo, y máxime Costa Rica como país OCDE, no tienen opción frente el avance de #Criptomonedas. Estas normas con rango legal, deben aprobarse para cumplir con estándares de transparencia fiscal. 11/12
— Johana Obando (@JohanaDiputada) October 24, 2022

Johan mentioned that her laser eye meme worked, as they are finally getting into the discussion regarding crypto initiatives in the country. She mentioned that the regulators will use MECA as a means to generate jobs. The ultimate goal is to attract companies in the nation to through the initiative to meet the objective.

#MECA🧵Nos alegra que el GIF de ‘ojos láser’ haya cumplido su objetivo, cual es, invitar a la conversación sobre la industria fintech, los #criptoactivos y #criptomonedas y la necesidad de establecer un marco de legalidad para dar seguridad jurídica a la economía digital. 1/12
— Johana Obando (@JohanaDiputada) October 24, 2022

Though the move appears similar to Nayib Bukele’s announcement to make Bitcoin the legal tender, Obando made it crystal clear that the initiative will entirely be different from it. The idea is to identify what virtual currencies are and enable them to operate free of any interruptions from Costa Rican authorities.

Only a couple of nations, El Salvador and the Central African Republic, have accepted any cryptocurrency as their legal tender. Nayib Bukele did it first during November last year. CAR regulators unanimously voted on making crypto assets as official currency in the nation in April 2022.

According to Forbes, 2021 saw multiple lawmakers presenting 35 bills to regulate digital assets including Virtual Currency Market and Regulatory Competitiveness Act to maintain competition in the international market, Virtual Currency Consumer Protection Act to prevent any price manipulation in crypto assets and more.

The regulators kept blockchain technology into consideration, and presented Blockchain Innovation Act, Digital Taxonomy Act and more to explore the potential applications of this tech in different areas. Governments of the world are working whatever they can to tighten their leash on cryptocurrencies but have failed to gain any significant grip yet.

The results regarding Johana Obando’s crypto bill are still awaited, but such attempts are a clear sign that some countries are working their way to bring digital assets in their economies. The conflict between regulators and crypto appears to be a never ending war where either governments will take control over the sector to make it centralized or the cryptosphere will remain under the title of “Wild West.”