Costa Rica's Largest Bank Launches First Bitcoin ETF

Costa Rica's largest state-owned bank, Banco Nacional (BN), has launched the country's first Bitcoin exchange-traded fund (ETF), marking a significant step in the Central American nation's embrace of cryptocurrencies. The Bitcoin ETF, introduced through BN's asset management arm, BN Fondos, will provide Costa Ricans with their first regulated crypto investment option through the banking system.

The bank is also introducing an S&P 500 ETF, offering investors a more traditional investment option. Both funds have a minimum investment of $100 and will be denominated in U.S. dollars. Pablo Montes de Oca, general manager at BN Fondos, explained that the ETF approach was chosen due to existing regulations, as Bitcoin is not considered an investment vehicle from a regulatory perspective, but the ETF is.

Costa Rica does not have explicit cryptocurrency laws, but activities not explicitly prohibited are considered legal under the country's constitution and civil code. This has allowed Costa Ricans to buy, sell, and hold crypto assets without restriction. However, the government has advised citizens and investors to be cautious when trading cryptocurrency.

The introduction of the Bitcoin ETF by Banco Nacional, which serves over 2.1 million customers, is a significant development. More than 40% of the country's population will now have access to a more secure and regulated way to invest in Bitcoin. Previously, crypto investments were only accessible through private platforms outside the banking system.

The launch of the ETF comes at a time when Costa Rica's government is still debating its crypto approach. In 2022, lawmakers proposed the Crypto Asset Market Law to provide a framework for digital currency transactions, but the bill has not advanced. For now, Banco Nacional's move offers a regulated investment alternative while the country continues its crypto debate.