LATAM’s Crypto Adoption: Panama Introduces Bill to Regulate Crypto and Recognize BTC and ETH as Payment Methods
With crypto law, the country seeks to become “compatible with the blockchain, crypto assets, and the internet” along with smart contracts and DAOs.
With this move, the Republic of Panama will regulate the use of cryptocurrencies throughout the country.
Congressman Gabriel Silva announced on Twitter that Panama had drafted a cryptocurrency law that would recognize both Bitcoin and Ethereum as payment methods. The bill will allow individuals and legal entities to freely use digital currencies as a means of payment not prohibited by the law.
“Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets, and the internet. This has the potential to create thousands of jobs, attract investment and make the government transparent,” reads the translated version of the bill.
Furthermore, the draft proposes that taxes and fees may be paid using crypto. Following the worldwide trend, cryptocurrency will be subject to capital gains tax but excluded from the value-added tax (VAT).
The country's lawmakers are also supporting the use of the underlying technology blockchain in the public and banking sector.
The project seeks to “expand the digitalization of the state” through the technology by digitizing the entity of individuals and legal entities, according to the draft. This digitization process will make Panama compatible with smart contracts and DAOs, the bill adds.
“The country has all the potential to be a digital identity provider for the rest of the world.”
The proposed legislation will further allow the use of distributed ledger technology, blockchain, or cryptocurrencies by issuers of securities to represent those releases.
The bill talks about Bitcoin as a hedge against inflation and its divisible nature, much like Ethereum and other crypto assets.
According to a local publication, Silva, a member of an independent and opposite party Bancada Independiente, said that the bill does not seek to impose digital currency or forced means of payment but rather goes for the freedom to use them.
Over the last two months, Silva met with public institutions like the National Bank, the Superintendency of Banks, and the Ministry of Finance that would be involved in this operation of crypto and said both the ruling and opposition benches are willing to deal with the bill.
While the use of cryptocurrencies is not illegal in the country, with this bill, lawmakers seek to bring certainties in the fiscal rules.