Lawmakers in Panama to Hold Discussions on Cryptocurrency Regulation

  • Like many third-world countries, Panama has taken a passive approach towards crypto regulations
  • A bill has been presented to start the process of regulation has been submitted to the Commerce Commission of Panama’s National Assembly
  • Panamanian lawmakers will start to analyze a draft bill that seeks to regulate cryptocurrencies in the nation
  • The bill includes a section where that suggest that cryptocurrencies will be used in some state-backed social security fund of Panama

Rolando Rodríguez, a Panama local deputy (MP) has presented a proposed cryptocurrency bill to the Commerce Commission of Panama’s National Assembly. This marks the first step for Panama to regulate the use of cryptocurrencies within its borders.

Panama to Begin the Crypto Regulatory Process

As the developed world continues to roll out new regulatory policies or fine-tune already existent crypto regulatory policies, more countries are catching up with the trend and beginning to start the process of creating a crypto regulatory framework.

Panama has largely sat behind the curve, taking a passive approach towards crypto regulations. However, things could change in 2021. According to La Estrella de Panama, the bill submitted by Rolando Rodríguez is advocating for a digitalized Panamanian economy.

According to the MP, Panama has been left behind by other countries that already have an existing legal framework for regulating cryptocurrency. He wants the country to establish a crypto-friendly legal framework for Panamanian companies to do business freely with digital assets.

He acknowledges the diversification possible with cryptocurrencies, and states that it is pertinent that the government steps up to create a legal framework that both protects the citizens from the vials of cryptos while giving them enough freedom to contribute to the nation’s growth with cryptos.

On the Flipside

  • Commissioner of the Securities and Exchange Commission (SEC) Hester Peirce is optimistic about crypto regulation in 2021
  • In an interview, she noted that she doesn’t want the blockchain and cryptocurrency industry to obsess over regulations, but ‘think about how the technology can be used.’
  • Her positive stance towards cryptos is contrary to Janet Yellen’s, who previously stated that cryptos were famed for being used for illegal transactions

Cryptos to Be Used in State-Backed Social Security Fund

While other countries have taken a defensive approach towards cryptocurrency regulations, there are early signs that the regulatory framework in Panama could favor the crypto industry.

According to Rolando Rodríguez, the crypto bill aims to bring “financial freedom” to all the Panamanians. The focus of the bill would be on Panama’s who currently do not have access to the traditional banking system.

In addition, the MP explains that in adopting crypto-friendly policies, the Panama government will be able to strengthen the social security fund, disability, old age, and death fund (IVM) of the country.

A Critical Time for Crypto Adoption in Panama

As more countries embrace the use of cryptocurrencies and/or blockchain technology, Rolando Rodríguez explains that the government of Panama is currently in a crucial time where it would be needing crypto-friendly policies.

He hopes that the Committee on Trade and Economic Affairs of the Assembly will give the proposed bill the urgent attention it requires. In addition, they also have to take the necessary decision to update its regulations to make Panama compete in the fast-growing globalized world.

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