Monday 5 December 2022

TSE rules out political party donations in cryptocurrencies

Electoral Code prohibits donations made to political parties in cryptocurrencies

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3 December 2022 - At The Banks - BCCR

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QCOSTARICA – The Tribunal Supremo de Elecciones (TSE) – Supreme Elections Tribunal – ruled out that political parties can receive donations through cryptocurrencies for the 2022 elections.

The electoral body is based on the fact that article 123 of the Electoral Code only authorizes donations through deposits that are credited to a bank account, said Ronald Chacón, head of the Department of Financing of Political Parties of the TSE.

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When donations are in cash, there must be an official receipt issued by the political party and it is received directly by the treasury.

“In turn, the electoral regulations oblige political parties in article 122 CE (Electoral Code) that the funds from donations, contributions or private contributions they receive must be deposited in a single account dedicated exclusively to those funds, in any bank of the National Banking System, which may be divided into subaccounts,” he explained.

Read more: Bitcoin will soon be ‘legal tender’ in El Salvador

In this way, in compliance with these regulations, the TSE will not consider as admissible the accreditation of a donation by means of other monetary values.

“Cryptocurrencies are not an authorized way to donate to a political party (in Costa Rica). Likewise, it should be noted that in matters of monetary policy the Central Bank does not admit cryptocurrencies as an authorized monetary unit in the country,” continued Chacón.

Rodrigo Cubero, president of the Banco Central de Costa Rica (BCCR), pointed out that the circulation and exchange of crypto assets is allowed because there is nothing that prohibits it.

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Of course, they are not assets that must be obligatorily accepted as a form of payment by citizens.

The Tribunal Supremo de Elecciones (TSE) in downtown San Jose 

“Thus, although its use is allowed in Costa Rica, whoever wishes to acquire these assets does so at their own risk. For this reason, it is important that those who decide to acquire this type of digital assets are well informed about their characteristics and the risks they entail,” stressed Cubero.

Despite the little investment in crypto assets in Costa Rica, they reported that both the Bank as well as the National Council for the Supervision of the Financial System (Conassif) and the financial sector superintendencies, “are keeping an eye on the evolution of crypto assets in the country with in order to determine if at any time they represent a risk to the stability of the financial and payments system or are an obstacle in the implementation of monetary policy”.

So far, none of the major political groups have reported receiving any donation of this type, precisely because the Electoral Code prohibits it.

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“It is important to emphasize that there is a TSE Donation Regulation to which the party fully adheres and specifies the mechanism for donations by individuals, both in cash and in kind,” said Kattia Rivera, President of the Partido Liberacion Nacional (PLN).

“Including the traceability of the origin of the funds, which is why we consider the use of this instrument as a means of channeling donations to political parties to be inconvenient,” said a spokesperson for the Partido Accion Cuidada (PAC) that has publicly stated in favor of any initiative that seeks to strengthen transparency through private donations.

In the event that any legislative initiative arises, a legal reform is required to be able to admit donations through cryptocurrencies, according to the TSE spokesperson.

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