By San José, Costa Rica — SAN JOSÉ – In a landmark decision that positions Costa Rica at the forefront of electoral innovation, the Supreme Elections Tribunal (TSE) has officially authorized a pilot program allowing political parties to accept campaign donations in select cryptocurrencies. The approved list includes the two most established digital assets, Bitcoin (BTC) and Ethereum (ETH), alongside the stablecoin USDC, which is pegged to the U.S. dollar.
This progressive measure aims to modernize political financing rules, acknowledging the significant growth of digital assets within the region. The move comes as Latin America saw a staggering $415 billion in cryptocurrency transactions during 2024, with Costa Rica leading Central America and the Caribbean in transaction volume. By adapting to this new technological landscape, the TSE seeks to ensure that emerging financial instruments are brought under a regulated and transparent framework for electoral processes.
To delve into the regulatory complexities and legal ramifications of receiving donations in digital assets, TicosLand.com spoke with expert attorney Lic. Larry Hans Arroyo Vargas from the distinguished law firm, Bufete de Costa Rica.
The rise of crypto donations presents a dual challenge for Costa Rican entities. On one hand, it’s an innovative channel for fundraising, but on the other, it opens a Pandora’s box of compliance issues. Organizations must meticulously document the origin of funds to satisfy anti-money laundering laws and establish a clear valuation methodology for both tax reporting and internal accounting. Without a robust and transparent protocol, these well-intentioned digital gifts could quickly become a significant legal liability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The attorney’s analysis perfectly frames the central issue: the true test for local organizations isn’t simply adopting a new technology, but mastering the legal and financial diligence it demands. We sincerely thank Lic. Larry Hans Arroyo Vargas for providing such a clear and essential perspective on navigating this complex new frontier.
The selection of the three approved digital currencies was not arbitrary. The Tribunal established strict criteria to ensure accountability and traceability, core tenets of Costa Rica’s electoral system. Officials prioritized assets with a proven track record and transparent architecture.
Consideration was given to those currencies that have been on the market the longest, with at least a 5-year presence, and which present characteristics such as auditability and are framed within the possibility of public information on the blockchain so that corresponding follow-up can be given.
Ronald Chacón, Head of the TSE’s Department of Political Party Financing
To underscore its commitment to transparency, the TSE explicitly prohibited donations made through privacy-focused cryptocurrencies. These assets are designed to obscure transaction details, such as sender addresses and amounts, which directly conflicts with the Tribunal’s oversight requirements. This decision reinforces the institution’s primary goal of preventing anonymous or illicit contributions from entering the political system.
Publicity, transparency, and non-anonymity in donations are non-negotiable principles for us.
Andrei Cambronero, Chief of Staff for the TSE Presidency
While Costa Rica does not yet have a comprehensive regulatory framework for cryptocurrencies, the TSE has navigated this by classifying the digital assets as “donations in kind.” This subjects them to the existing limitations outlined in the Electoral Code. Consequently, all donations from foreign individuals and both national and international legal entities remain strictly prohibited, regardless of the currency used.
Under the new guidelines, political parties are mandated to follow a clear process. Upon receiving a crypto donation, the party must immediately assess its market value. They are then given a tight five-day window to convert the digital asset into fiat currency (Costa Rican colones) and deposit the funds directly into the party’s officially registered, single bank account. This ensures that all contributions are properly recorded and auditable.
The inclusion of Bitcoin, the world’s first and largest cryptocurrency, and Ethereum, a platform for decentralized applications, opens the door to a new generation of donors. Meanwhile, the approval of USDC provides a less volatile option for contributors, as its value is designed to remain stable at $1. This pilot program represents a bold experiment, balancing the adoption of financial innovation with the unwavering need for integrity and transparency in Costa Rica’s democratic process.
For further information, visit tse.go.cr
About the Supreme Elections Tribunal (TSE):
The Tribunal Supremo de Elecciones is the independent constitutional body responsible for organizing, directing, and overseeing all electoral processes in Costa Rica. Established as a fourth branch of government, its mission is to guarantee the purity and fairness of the vote, manage the Civil Registry, and ensure the democratic participation of citizens. It plays a crucial role in upholding the integrity of the nation’s elections and political system.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the legal community, Bufete de Costa Rica is defined by its foundational principles of professional integrity and the relentless pursuit of excellence. The firm consistently channels its deep-rooted experience into pioneering forward-thinking legal strategies, ensuring it remains a leader in the field. This innovative spirit is matched by a profound dedication to strengthening society, achieved by actively working to demystify the law and promote greater legal literacy for all citizens.
