Costa Rica doesn’t treat Bitcoin, Ethereum, or any other cryptocurrency as money. Not legally. Not officially. Not even close. That’s not because the country hates crypto - it’s because it’s trying to avoid the chaos seen in places like El Salvador, where Bitcoin became legal tender and sparked economic confusion. Instead, Costa Rica has carved out a middle path: crypto exists, but it’s not money. And that makes all the difference.

What ‘No Official Recognition’ Really Means

The Central Bank of Costa Rica made it crystal clear back in 2021: cryptocurrencies are not legal tender, not foreign currency, and not a form of payment that businesses must accept. That means if you walk into a coffee shop in San José and try to pay with Bitcoin, the barista can say no - and it’s completely legal. You can’t use crypto to pay taxes. You can’t use it to settle debts in court. And banks don’t have to treat it like dollars or colones.

But here’s the twist: crypto isn’t banned. People trade it. Businesses accept it. Exchanges operate. The government just refuses to give it the same status as the national currency. This isn’t a crackdown - it’s a deliberate pause. The goal? To avoid financial instability while still letting innovation happen.

How Crypto Is Still Allowed - And Regulated

Even without legal tender status, crypto businesses aren’t operating in a wild west. Since 2021, the government has been quietly building rules around them. The big shift came in July 2025, when a new bill, Proyecto de Ley Expediente 22.837, passed its first legislative debate. This law doesn’t make crypto money. Instead, it defines what crypto businesses can and can’t do.

Under the new rules, any company offering crypto services - exchanges, wallet providers, custody services - must register with SUGEF, the country’s financial oversight body. But here’s the catch: registration doesn’t mean approval. It’s more like a heads-up. The government says, “We know you’re here. Now follow these rules.”

Those rules are strict. Every crypto business must:

• Verify the identity of every customer (KYC)
• Keep detailed records of every transaction for at least five years
• Flag suspicious activity, especially involving high-risk users like politicians or foreign entities
• Have internal controls and trained staff to handle anti-money laundering (AML) risks

This isn’t about stopping crypto. It’s about making sure it doesn’t become a tool for criminals. The same rules apply to banks and money transfer services - crypto firms just got added to the list.

Why Costa Rica Chose This Path

El Salvador made headlines in 2021 when it made Bitcoin legal tender. But the results were messy. Businesses struggled to accept it. Tourists got confused. The IMF warned of economic risks. Costa Rica watched. And decided not to follow.

Instead, it looked at Panama, which created a “regulatory sandbox” for crypto startups. Costa Rica chose something different: a tight, crime-focused approach. The logic? If you can’t prevent money laundering, you shouldn’t encourage adoption.

Ricardo Quesada, a former government official, put it plainly: “This law isn’t about promoting crypto. It’s about protecting the financial system.” That’s why the bill focuses on VASPs - Virtual Asset Service Providers - not on making crypto a currency.

It’s also why Costa Rica is aligning with global standards like the OECD’s Crypto-Asset Reporting Framework (CARF) and the FATF guidelines. The country wants to be seen as compliant, not chaotic. That matters for foreign investors, international banks, and future trade deals.

The Real Problem: Banking Access

Here’s where things get messy for crypto businesses in Costa Rica.

Yes, you can register a company. Yes, you can hire staff. Yes, you can build a platform. But opening a bank account? That’s a nightmare.

Traditional banks - the kind that hold most of the country’s money - are terrified of crypto. Even though the law doesn’t ban it, banks still see it as high-risk. Many refuse to work with crypto firms outright. Others demand impossible paperwork, charge exorbitant fees, or shut accounts after a few months.

According to user reports on Reddit and industry surveys, entrepreneurs spend 6 to 8 months trying to find a bank willing to take their money. One founder, known online as “CRCryptoFounder,” said he was rejected by three major banks before finding a small regional credit union willing to work with him - under strict monthly audits.

The result? Many crypto startups operate on cash or offshore accounts. Some use crypto-to-fiat gateways based in other countries. It’s a workaround, not a solution. And it adds cost, complexity, and risk.

Who’s Winning and Who’s Losing

Despite the banking headaches, Costa Rica still attracts crypto businesses - and for good reason.

• Tax benefits: No capital gains tax on crypto trades for individuals. Corporate tax rates are among the lowest in Latin America.
• Political stability: No coups, no hyperinflation, no sudden policy reversals.
• Infrastructure: Reliable internet, skilled tech workers, and a growing startup ecosystem.

A 2025 survey by the Blockchain Association of Costa Rica found that 78% of crypto firms would recommend the country as a base - even with the banking issues. Why? Because the upside outweighs the friction.

But it’s not all wins. Consumers get little protection. If a crypto exchange gets hacked or disappears, there’s no government insurance fund like FDIC. No refunds. No recourse. And while the law requires businesses to follow AML rules, it doesn’t force them to insure user funds or disclose their financial health.

Legal expert Maria Fernanda Rojas put it bluntly: “Costa Rica’s rules protect the system - not the people using it.”

What’s Coming Next

The law passed its first vote in July 2025. Final approval is expected by October 2025. But that’s just the beginning.

A second bill, Proyecto de Ley 23.415 (the “Cryptoassets Market Law”), is still being reviewed. This one could add more structure - maybe even licensing tiers for different types of crypto businesses. SUGEF has also been allocated $2.3 million to upgrade its digital monitoring systems, so it can track transactions in real time.

By mid-2026, experts predict Costa Rica will fully meet FATF standards. That means international banks will be more willing to work with Costa Rican crypto firms - if they’re compliant.

The country’s crypto market is already worth $1.2 billion. About 14.3% of adults have owned crypto at some point. That’s below the Latin American average, but growing fast. Deloitte projects a 23.5% annual growth rate through 2028 - if the new rules are implemented smoothly.

Bottom Line: It’s Not a Ban. It’s a Tightrope.

Costa Rica isn’t trying to kill crypto. It’s trying to keep it from killing the financial system.

You can use crypto. You can build a crypto business. You can even make money from it. But you won’t get government backing. You won’t get easy banking. And you won’t get consumer protection.

It’s a calculated gamble. The country bets that a cautious, rules-first approach will attract serious players - not speculators or scammers. And so far, it’s working. Businesses are coming. Banks are slowly adapting. The tech is improving.

But if you’re thinking of starting a crypto company in Costa Rica, don’t expect a red carpet. Expect paperwork. Expect delays. Expect banks saying no. And expect to work twice as hard to prove you’re clean.

That’s the price of doing crypto in a country that refuses to call it money - but won’t stop you from using it, either.