The Panamanian Legislative Assembly has approved a bill to regulate the commercialization and use of cryptocurrency assets. If this bill is signed by the president, Panama citizens will be able to use cryptocurrencies to make tax payments and pay off their civil debts.
Panama embraces cryptocurrencies
The bill was introduced by 32-year old Congressman Gabriel Silva. The legislature announced that the bill had passed on April 28, adding that it would transform Panama into “a hub for innovation and technology.”
El Salvador, a Central American country, accepts Bitcoin as legal tender. Following the implementation of the Bitcoin law last year, El Salvador saw an increased number of tourists and an influx of foreign currency.
Panama could be looking at enjoying the same benefits that El Salvador has since the implementation of the Bitcoin law. Part of the bill reads that “the organs and entities of the Republic of Panama may receive payments, directly or through payment processors or agents contracted for this purpose, for taxes, fees and other tax obligations on crypto-assets.”
The bill adds that several cryptocurrencies could be adopted for crypto tax payments and other purposes. Some of these cryptocurrencies include Bitcoin (BTC), Ether (ETH), XRP, Algorand (ALGO), Stellar (XLM), Litecoin (LTC), Elrond (EGLD), XDC Network (XDC and IOTA.
According to the Panama tax laws, cryptocurrencies incur zero capital gains tax. The new law will make Bitcoin and other supported cryptocurrencies legal tender. However, Silva has clarified that Panama’s law will be different from El Salvador’s. Despite this law, it will not be compulsory for businesses in El Salvador to accept cryptocurrency payments.
“Here in Panama, we are making this optional. In addition, the El Salvador law speaks only of Bitcoin. However, the plan approved in the first debate establishes the possibility of using any cryptocurrency. We cannot and do not want to close the door to the use of more than one [type of] cryptocurrency,” he said.
Growing adoption of cryptocurrencies
The adoption of cryptocurrencies has grown significantly over the past year. Developing countries have been leading the way in making cryptocurrencies popular. The Central African Republic recently declared Bitcoin to be legal tender.
Brazil has also approved a regulatory bill for the cryptocurrency sector. The Central Bank of Cuba announced it would start issuing licenses to virtual asset service providers (VASPs). This could foster the use of cryptocurrencies in the country.
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