Costa Rican legislators are working to make their nation a Bitcoin-friendly one with considerably reduced cryptocurrency taxation.
A plan to control the cryptocurrency market in Costa Rica was presented to Congress this week by Costa Rican legislator Johana Obando.
The Cryptoassets Market Law (MECA), according to Obando, who now has a meme of a pair of laser eyes on her Twitter page, will “give protection to individual virtual private property, to the self-custody of crypto-assets, and to decentralization” without the involvement of the nation’s central bank, but in “perfect harmony” with it.
The goal is to have legislation that defines digital assets and permits anyone to purchase, sell, use, and store cryptocurrencies without interference from the Costa Rican government.
The initiative, introduced by Congressmen Luis Diego Vargas and Jorge Dengo, would prevent the government from taxing cryptocurrencies when they are used to purchase products. Additionally, the government wouldn’t be able to tax cryptocurrency that is kept in cold storage, and cryptocurrency produced by the mining sector wouldn’t be subject to profit tax either. However, the law would make trading profits from cryptocurrencies subject to income taxes.
In sum, the politicians want the Costa Rican government to acknowledge the existence of cryptocurrencies and permit individuals to possess and basically use them freely. Obando predicted on Twitter that this will eventually draw in international capital, fintech firms, and Costa Rican job creators.
However, Obando made it very clear that the law will be distinct from the Bitcoin Law of El Salvador.
Since it is technologically possible, businesses in El Salvador are required to accept Bitcoin as legal tender.
“Is the proposal in this law the same as El Salvador’s? Not at all,” Obando wrote on Twitter. “MECA establishes cryptocurrencies as a private virtual currency, with unrestricted access and use, and does not compel the State to obtain or replace them.”
The world’s first nation to accept Bitcoin as legal tender was El Salvador. Nayib Bukele, the president of the Central American country, has received criticism for the bill (and his personal investments in cryptocurrency, which he claims he buys on a whim, naked on his phone.)
The Costa Rican bill is comparable to the one that was proposed in Panama earlier this year; that bill, known as the “Crypto Law,” sought to control the usage of Bitcoin and legitimize decentralized autonomous organizations (DAOs), but the president of that nation overruled it.
A fintech bill that aims to regulate the cryptocurrency industry was just approved by Chile’s senate, while Paraguay is seeking to provide clear regulations for the Bitcoin mining sector.
