Business 23 July 2018

Dennis Wafula

Workers in Costa Rica can legally accept wages in cryptocurrency

Costa Rican workers can receive part of their salaries in cryptocurrencies. Costa Rican laws allow employers to pay their staff not just with fiat currency, but also goods, which experts interpret to mean that cryptocurrency, which is considered a commodity, will fit in this category.

According to legal interpretations, the country’s fundamental principle on the law that states, “What is not prohibited is tacitly permitted.” With this in mind, experts believe paying parties using cryptocurrencies is within the stipulated laws. However, the legal minimum wage must still be paid in legal tender, with digital currencies falling under the “incentive” category.

In October 2017, the Central Bank of Costa Rica (CBCR) published a statement that said cryptocurrencies were outside the national banking system. The CBCR, like most central banks, did not consider cryptocurrencies as real money. In order to pay parties using cryptocurrencies, employers will need to treat digital currencies as “quasi-money,” which are assets that can be easily converted into cash. Currently, Costa Rica has a working quasi-money concept, which local employers use to remunerate their staff with goods.

Several members of the cryptocurrency community in the country believe crypto payments could largely change Costa Rica’s economic position by increasing cash flow in the country.  According to Rolando Perlaza, a worker at Central American law firm Nassar Abogados, the domestic market is largely open to using digital currencies.

In an interview with the Costa Rica News, Perlaza said, “This type of payment would in no way replace traditional or liquid cash. It would rather become an incentive for the workers, who could decide if they accept these currencies as payment for their services. They are protected under Article 166 of the Labor Code.”

In the last few years, cryptocurrency trade in the country has seen tremendous growth. Many businesses have made room for cryptocurrencies by allowing customers to make payments using different cryptos. Costa Rica’s domestic crypto market is also growing due to the availability of cheap power from renewable sources, which has been attracting crypto miners to set up shop in the countr.

The Costa Rican government and relevant financial authorities have yet to comment on the matter. It remains unclear whether financial authorities and lawmakers will accept this take on the Costa Rican laws.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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