Cryptocurrencies have been a hot topic in Latin America since the pioneering adoption of Bitcoin as legal tender in El Salvador in 2021. While countries like Brazil, Mexico, Colombia, and Chile are advancing with Fintech regulations, Costa Rica finds itself in a regulatory crossroads.
A study of the Promoter of Foreign Trade of Costa Rica (PROCOMER) highlights that the success of Fintech ecosystems globally has been linked to specific regulations, citing examples such as the United States, the United Kingdom, and Singapore. Contrary to common belief, regulation doesn’t restrict but drives the development of this industry. However, Costa Rica lacks specific regulations, leaving a legal gap that affects companies with capabilities in cryptocurrencies.
The absence of regulation creates uncertainty: companies can operate without authorization, while regulated ones must comply with requirements similar to traditional financial entities. This disparity discourages the market, showing that Costa Rica is losing ground against countries with more advanced regulatory frameworks.
In Europe, regulatory momentum towards cryptocurrencies has gained ground. Countries like Portugal and Germany have established clear regulations for these assets, sparking investor interest in these jurisdictions. This European trend was consolidated with the approval by the European Parliament of the Markets in Crypto-Assets (MICA) Law.
The current landscape shows a regulatory lag in Costa Rica compared to other jurisdictions. The lack of clarity in key areas such as cryptocurrencies and blockchain may exclude the country from significant global investments and delay other industries in their interaction with international buyers.
PROCOMER points out that the lack of regulation not only hinders the creation of a new industry in Costa Rica but also negatively impacts the current export offering and the competitiveness of existing companies. It’s urgent, from the legislative power, to establish a legal framework that fosters a cryptocurrency market with legal certainty.
Legal Framework in the European Union: Markets In Crypto Assets (MiCA)
In Europe, the European Parliament’s Commission proposed the MiCA Regulation to standardize digital finance activity. This regulation aims to increase the integrity of the EU’s common market and establish a regulatory framework that responds to new market demands.
MiCA, a pioneering regulation, seeks to provide legal certainty, support innovation, protect consumers and investors, and ensure financial stability. It provides precise definitions for cryptocurrencies and establishes clear rules for each category, which also influences tax determination.
The MiCA proposal is a response to regulatory disparity among EU member countries, ensuring uniform operating conditions for companies within the region. Additionally, it contains specific rules against money laundering and terrorism financing, strengthening transparency in financial services.
The lack of a common framework in the EU has hindered the expansion of services and competition among providers, affecting the availability of funding and access to financial services. MiCA seeks to remove these obstacles, providing legal certainty and fostering innovation in the cryptocurrency market.
The Costa Rican Challenge: Urgent Need for Regulation
Costa Rica faces a critical challenge in cryptocurrency regulation. The lack of a specific legal framework not only limits the development of a new industry but also hampers competitiveness in the global market. PROCOMER’s initiative underscores the urgency of establishing a clear and coherent regulatory framework to foster economic growth and confidence in the Costa Rican market.
From the legislative power, immediate action is required to ensure a transparent and regulated cryptocurrency market, thus attracting investors, driving the economy, and maintaining competitiveness against increasingly digital and innovation-oriented international markets.