Panama considers recognizing cryptocurrency as a means of payment

A bill wants to recognize cryptocurrency as a means of payment in Panama

This Monday, September 6, 2021, independent congressman Gabriel Silva introduced a bill to make Panama ” a country compatible with the digital economy, blockchain, cryptocurrencies and the Internet.” The politician announced the news on his Twitter account a few hours later.

“Today we present you the Crypto law. […] It has the potential to create thousands of jobs, attract investment and make government more transparent, Gabriel Silva says on Twitter.

The congressman had already come out in favor of cryptocurrencies last June, shortly after El Salvador’s decision to adopt Bitcoin as its legal tender. Inspired by the example of Salvadoran President Nayib Bukele, Gabriel Silva had pledged to present a law supporting cryptocurrencies before the congress.

First of all, the congressman’s bill wants to authorize all the country’s inhabitants and businesses to use cryptocurrency as a means of payment for any civil or commercial transaction. More importantly, the text plans to provide a legislative framework for individuals who choose to bet on digital currencies. But unlike El Salvador, Panama will not require businesses to accept Bitcoin (BTC ) or any other cryptocurrency as a means of payment.

“To provide legal, regulatory and fiscal security for the use, possession and issuance of digital securities and cryptocurrencies within the Republic of Panama,” the bill details.

Currently, cryptocurrencies are not banned in Panama. In fact, the country’s constitution does not allow the government to impose a national currency. Since 1904, however, Panama has adopted the U.S. dollar as its common currency. The balboa, a local currency backed by the dollar, also circulates in the country.

Read also: 70% of El Salvadorans are against the adoption of Bitcoin (BTC) as legaltender

Digitizing government services through blockchain

The bill also wants to create a bridge en between traditional finance and the cryptocurrency sector. In particular, Gabriel Silva raised the possibility of connecting a traditional bank account to a cryptocurrency exchange platform.

“Create a regulatory framework that promotes banking interoperability with a view to fostering greater financial inclusion, the emergence of an innovative and robust ecosystem for financial services, greater competition among financial service providers and freedom of choice for the consumer, the text of the law details.

Finally, the text advocates the use of blockchain technology to digitize government services. The project aims to improve the digitisation of infrastructures by relying on technologies such as blockchain or smart contracts.

In particular, the text plans to digitize the identity of natural and legal persons, regulations, their adoption and signatures, the issuance of administrative acts and to migrate public records” on the blockchain. Ultimately, all these records would be registered in a distributed, decentralized and inalienable registry.

Mirroring Panama, many South American countries have shown interest in digital currencies since El Salvador’s announcement. Mexico has decided to accelerate the development of a Bitcoin law. Meanwhile, Paraguay has hinted that the country may turn to cryptocurrency.

Several South American countries are still in the grip of the US dollar. Since the end of the Bretton Woods agreement, many nations have become dependent on the dollar king. By adopting alternative currencies, such as Bitcoin, South American governments are likely seeking to reduce the hegemony of the greenback.

Also read: U.S. asks El Salvador to regulate Bitcoin (BTC)

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About the author: Florian Bayard

Panama considers recognizing cryptocurrency as a means of payment