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Crypto Currencies in Panama

This article from Blockworks:

Panama became the latest country to move forward with cryptocurrency legislation Thursday when the National Assembly passed a bill that will allow for private and public use of digital assets.

If the proposal is signed into law by Panamanian President Laurentino Cortizo, citizens will also be able to pay taxes using cryptocurrencies, the National Assembly said.

“This bill seeks for Panama to become a hub of technology innovation in Latin America,” Gabriel Silva, a member of the National Assembly and one of the lawmakers promoting the bill, said during a local news interview Thursday.

The project, if passed, will allow Panamanians to buy goods and services in cryptocurrencies at any legally operated civil or commercial business.

The project goes beyond regulating individual tokens, Silva said, aiming to provide a broader scope than El Salvador’s bitcoin as legal tender measure that was passed in September.

The law aims to promote “the use of distributed ledger technology and blockchain in the digitalization of the identity of natural and legal persons in or from the Republic of Panama and as a means to make the public function transparent,” a translated version of the project read.

One of the most significant aspects of the legislation is that digital currencies would be considered “foreign-sourced income” so there would be no capital gains tax in Panama.

President Cortizo must still sign the Bill but that is expected to happen in early May.

Coindesk wrote:

Panamanian Congressman Gabriel Silva – the sponsor of a bill passed on Thursday regulating the use of cryptocurrencies in the country – said the bill doesn’t allow for any crypto to become legal tender, but makes possible free use of crypto as a means of payment for any transaction.

"We can't just establish bitcoin because that will be unconstitutional and if it's unconstitutional, then the project won't happen," said Silva, speaking on Twitter spaces. 

Panama has no currency per its constitution, but has officially been on the U.S. dollar for more than a century.

Prior to the bill, said Silva, it was illegal for digital asset companies to set up shop in Panama, but that would change once the legislation becomes law.

Additionally, he said, "The idea is to just respect the tradition that Panama has already had for many years, where the country taxes what happens inside of its borders, and the internet is obviously not in any country's borders," explained Felipe Echandi, a local crypto entrepreneur who assisted Silva in drafting the bill.

President Laurentino Cortizo still must sign the bill for it to become law, but the legislation was passed by a 40-0 vote, suggesting good prospects for that to happen.

Jackie Lange

Jackie Lange is the founder of Panama Relocation Tours and lives in the highlands of Boquete Panama. She has helped thousands of people relocate to Panama.

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Comments

  1. Phil Coleman says

    I am not a fan of cyrpto currencies and there is no long term studies as to the real impact will be on any society. Currency needs to be backed by assets. If I cannot buy or sell assets using crypto then what.

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