After the National Assembly passed the new crypto regulation bill on Thursday, Panama took a huge step towards becoming “a hub of technology innovation” in Latin America, according to Gabriel Silva, a member of the National Assembly in Panama and a proponent of crypto.
Aprobada la Ley de Crypto de Panamá! Esto ayudará a que Panamá se vaya consolidando como hub de innovación y tecnología de America Latina!— Gabriel Silva (@gabrielsilva8_7) April 28, 2022
Crypto Law approved in third debate! This will help Panama become a hub of innovation and technology in Latin America!
The proposition is yet to be approved by President Laurentino Cortizo, but experts say the legislation is more advanced than that of neighbouring El Salvador’s crypto bill. For instance, it includes tokenization, which regulates the conversion of precious metals into a digital format. Furthermore, the bill will cover NFTs, which in Panama often come in the form of digital artwork.
Seeking the Adoption of Crypto in Business Ventures as Well as Everyday Life
The Panamanian government claims that the new law will help citizens get access to financial services. Despite the internet being widely used in Panama, only 1 out of 4 citizens have bank accounts. While the main pros for the regulation of cryptocurrencies in Panama are related to financial freedom and accessibility, experts fear that switching to the highly volatile capital form will not be convenient for a lot of small and medium businesses in Panama. Despite governmental institutions showing enthusiasm, it is likely to take at least a couple of years before crypto can be put to actual use.
International Partners Worried by Controversial Circumstances
In contrast to El Salvador, Panama is willing to regulate a wide range of cryptocurrencies including Ethereum (ETH), LiteCoin (LTC), Stellar Lumens (XLM), XRP, and more.
In spite of Gabriel Silva claming that the new bill will help “develop the crypto industry to attract more investors and generate higher employment”, critics of the bill acknowledge that Panama was already on the EU’s list of tax havens, and a crypto-based payment system would help Panama get away with not going through due diligence processes, which are required by international organizations.
On the Flipside
- The legal permission to use crypto from Panama’s government comes just one day after the Central African Republic (CAR) adopted Bitcoin as legal tender.
- The first country to do that was El Salvador in September 2021.
- Several countries in Latin America are working on crypto-related legal frameworks.