Panama Introduces Bill To Allow Use Of Cryptocurrencies For Payments

Panama is the latest Latin American country contemplating cryptocurrencies, joining El Salvador, which today became the first country in the world to officially make bitcoin legal tender.

On September the 6th, a member of Panama’s independent opposition party,  Bancada Independiente, presented a bill that could spearhead the incorporation of bitcoin as an alternative currency and potentially make the country “compatible with the blockchain, crypto assets, and the Internet”.

Newly-Proposed Legislation Seeks To Regulate Crypto Assets

Panamanian congressman Gabriel Silva announced on Twitter he had introduced a bill to regulate cryptocurrency and allow legal and natural persons living in the country to use Bitcoin and Ethereum as a valid method of payment for civil, commercial, or tax operations. 

The draft bill document shared by Silva noted that bitcoin and other cryptos enable quick and cheap payments in spite of the distance between the parties or the transaction volume.

Silva emphasized that the cryptocurrency project would create many jobs for the residents, attract massive investments as well as make the Panamanian government more transparent.

Silva’s crypto bill also proposes to move the country’s public records to blockchains and use the technology to digitize legislative and administrative operations. Moreover, the bill aims to make Panama “compatible with new forms of [the] establishment of trust between people and businesses such as smart contracts and new forms of organization, such as decentralized autonomous organizations or DAOs.”

It is perhaps worth mentioning that Panama does not have a central bank and it adopted the United States dollar as a payment means in 1904 after the Taft-Arias monetary agreement. Panamanians also use their Balboa currency alongside the USD. If the bill is passed into law, the residents will be able to pay their taxes using cryptocurrencies — just like in El Salvador.

Panama’s Proposed Bill Differs From El Salvador’s Move

While Panama appears to be following in the footsteps of El Salvador, there are a few dissimilarities. 

Firstly, the situation in Panama will be a bit different from El Salvador where local businesses are obliged to accept cryptocurrencies as payment for goods and services. An interesting excerpt from the draft legislation is that Panama’s new bill would allow businesses and residents to choose whether they want to receive payments in crypto or fiat.

The Panama crypto-friendly congressman postulated that the draft bill is the result of the collaborative effort between citizens and various industry and technology experts. Furthermore, it was prepared to bear in mind recommendations outlined by intergovernmental organizations like the Financial Action Task Force (FATF). 

Additionally, while Silva’s proposed law would enable businesses to make or accept crypto as payments for legal transactions, it does not propose the use of bitcoin or crypto in general as legal tender.