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Panama passes bill to regulate cryptocurrencies

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29
Apr
  • On Thursday, April 28, the Panamanian legislature approved a project to regulate cryptocurrencies in the country.
  • Currently, the bill is on the desk of Panamanian President Laurentino Cortizo, awaiting signature or rejection.

Panamanian Congressman Gabriel Silva has drafted a bill to regulate the use of digital assets as a means of payment.

We are introducing Crypto Law. We aim to make Panama a country compatible with blockchain, crypto-assets and the Internet,

He said the adoption of the initiative will create “thousands of jobs,” attract investment, and “make the government transparent.”

The document allows for the use of cryptocurrencies for individual and commercial transactions. Residents are expected to be able to pay taxes and fees with digital assets.

Silva said in a commentary to CoinDesk that cryptocurrencies are currently not banned in Panama. The republic’s national currency is the Panamanian Balboa, which has been firmly pegged to the U.S. dollar since 1934. The latter is legal tender in the country.

The new bill also imposes a capital gains tax on cryptocurrencies, added Felipe Echandi, the document’s co-author. According to him, the aim of the initiative is to create conditions for the mass use of digital assets.

Another aspect is to “expand the digitalization of the state” through the use of blockchain technology by digitizing the identity of individuals and legal entities. The authors believe that this will make Panama “compatible” with smart contracts and DAOs.

“The country is well-positioned to become a digital identity provider for the rest of the world, as Estonia has done with its digital residency program,” Echandi explained.

Bill passage process

On Thursday, Panama’s legislative session approved the draft, and it is currently awaiting the signature of the Latin American country’s current president. The bill was passed by the Economic Affairs Committee of the Panamanian Legislature last week before its final approval. After the legislative process, Panamanian President Laurentino Cortiso can veto the bill or sign it into law.

More and more countries are following El Salvador’s example and trying to create a legal framework to regulate the cryptocurrency market. For poor countries with weak economies, the move could help control inflation and reduce dependence on the U.S. dollar, which is currently the world reserve currency.

Also read: 60% of El Salvador Bitcoin wallet users stopped using it after getting the free BTC: Report

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