Panama Crypto Laws

„I think all Latin American countries are in a good position to adopt cryptocurrencies as an alternative payment method. What for? Because most of them are known to have traditionally fragile financial systems, that is, their fiat currency backbone has always been relatively weak and some of them have even used the US dollar as their second legal tender. This means they have more political freedom to take risks by allowing currencies generated by cyber protocols to be used in their economies. And this freedom will help them move faster in their development and digital transformation than some of the well-known business leaders, especially the EU Member States. There are also questions about the scale of crypto use, as Bitcoin adoption in El Salvador has been poor. Shortly after Bitcoin launched, a survey by the Chamber of Commerce of El Salvador found that more than 80% of people didn`t want Bitcoin remittances — perhaps because of the astronomical high ATM fees for converting Bitcoin to U.S. dollars — and more than nine in 10 rejected the idea of taking their salaries as digital coins. Meanwhile, a new report from the U.S. National Bureau of Economic Research revealed this week that only 20 percent of adult citizens in El Salvador use the Chivo wallet app. The bill could also make banks that have created barriers to the use of cryptocurrencies more cooperative, said Jose Fabrega of CryptoSPA, a hub for crypto and blockchain services. On April 28, 2022, Panama`s National Assembly announced that it had passed Law No. 697, which regulates the commercialization and use of cryptoassets. The bill provides that Panamanian residents and businesses can freely use these assets as payment for any business transaction permitted by Panamanian law.

Andrãs©Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC and ETH. Although Bitcoin is the most popular cryptocurrency, the bill is not limited to that. Instead, it allows various crypto assets such as Bitcoin, Ethereum, Litecoin, Stellar, XRP, XDC Network, IOTA, Algorand, and Elrond. Under the new legislation, Panamanians can use crypto assets as a means of payment for any civil or commercial transaction that is not prohibited by law in the country. Panama is on the European Union`s list of tax havens, and Romain Dromard, chief executive of financial investment advisory firm K&B Family Office, said the crypto bill would not help make it more transparent. Crypto assets are regulated by oversight bodies and the government to ensure that they are not used for illegal purposes. As a result, just like traditional means of payment, cryptocurrencies are subject to anti-money laundering (AML) procedures, which are implemented in accordance with Financial Action Task Force (FATF) regulations and recommendations. In particular, concern over FATF sanctions against Panama is one of the reasons why the Panamanian president is unwilling to sign the law in its current form. When the law is finally signed, Panama will become the second Central American country to regulate the issuance of cryptocurrencies.

El Salvador`s neighboring country was known for being the first country to make Bitcoin (BTC) legal. Patrick Cannon, a tax attorney at Cannon Chambers, told Fortune on Friday that Panama`s new law, if approved, will likely appeal „to all sorts of scammers and people who trade things they shouldn`t be traded with,” because cryptocurrencies can be traded anonymously. In a TikTok video released after lawmakers approved the bill, Silva said blockchain technology — the decentralized platform that enables cryptocurrency transactions — would be used by the Panamanian government to enable „faster, more efficient and more transparent processes.” However, unlike El Salvador, Panama`s bill covers cryptocurrencies other than Bitcoin and would not require local businesses to accept digital assets. In addition, the bill states that the Innovation Authority of the Government of Panama should consider the use of blockchain technologies in public registries if it can promote transparency. In addition, the Government of Panama will have the power to offer individuals and businesses digital wallets to make payments and exchange cryptoassets securely, integrating and facilitating the latest blockchain technologies. Panamanian agencies will receive payments for taxes with cryptocurrencies in accordance with the relevant guidelines that will be issued by the Panamanian tax authority later in 2022.