The Legislative Assembly of Panama has passed a bill regulating the commercialization and use of cryptocurrencies. Once signed by the President, it will enable residents of the country to pay their taxes and civil debts using multiple digital assets.
A rival to El Salvador?
Gabriel Silva – the 32-year-old Panamanian Congressman behind the bill – announced Its passage on Thursday after it was approved in its third debate. He said the legislation would help make Panama a “center of innovation and technology” in Latin America.
When El Salvador, Panama’s Central American neighbor, adopted bitcoin as legal tender, it saw an influx of tourists and foreign money. This law may have a similar effect, given that it has some similar terms in its language.
For example, paragraph 8 of the Google-translated version of the bill reads that “organs and entities of the Republic of Panama may receive payment for taxes, duties and other tax obligations, either directly or through payment processors or agents contracted for this purpose.” Through. on crypto-assets.” The cryptos allowed for this purpose will be determined by future legislation.
At the same time, Article 7 states that “any number of cryptocurrencies may be freely agreed upon as a means of payment for civil or commercial purposes”. [debt] Not prohibited by the legal system of the Republic of Panama”. These cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), XRP, Litecoin (LTC), XDC Network (XDC), Elrond (EGLD), Stellar (XLM), IOTA and Algorand (ALGO) are included.
In addition, cryptocurrencies will be subject to a 0% capital gains tax, according to the regulations of Panama’s regional tax system. Given these details, the new law makes bitcoin – and possibly many other cryptocurrencies – a de facto legal tender.
However, speaking on Radio Panama this week, Silva clarified some important differences from El Salvador’s law. For one, it does not oblige businesses to accept crypto payments.
“Here in Panama, we are making it optional,” he said. “Furthermore, El Salvador law only speaks of bitcoin. However, the scheme accepted in the first debate establishes the possibility of using any cryptocurrency.”
“We can’t and don’t want to close the door for more than one use” [type of ] cryptocurrency,” he said.
Bitcoin Adoption for the Global South
Bitcoin has been making waves this week as its regulatory adoption spread across several developing countries. Just yesterday, CryptoPotato confirmed that cryptocurrencies have been made legal tender in the Central African Republic.
On the same day, Brazil flagged off its regulatory bill for the crypto industry. Cuba’s central bank also revealed its decision to start issuing licenses to virtual asset service providers.
However, government adoption does not mean user adoption. Since its inception, only 40% of the country had downloaded the Chivo bitcoin wallet in El Salvador, with the majority only doing so for their $30 BTC incentive.
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