Panama joins the list of Latin American countries that are approaching bitcoin (BTC). A bill, submitted to the National Assembly, seeks to regulate all activities related to cryptocurrencies. The Central American country will also evaluate using digital assets as an optional payment method to purchase products and services.
The draft legislation consists of eight chapters and 31 articles covering tax aspects, measures to counter money laundering, technical training, mining of digital assets and permits for banks to design business models with cryptocurrencies.
For accounting purposes, Panamanian entities will be able to use bitcoin or cryptocurrencies to pay taxes to the State or its institutions, but they must be expressed in balboas, the national currency, or dollars. The receiving institutions will be in charge of “immediately” exchanging the funds to stablecoins
to avoid market volatility.
The Ministry of Commerce and Industries (MICI) will create a category called “Business with Blockchain Technology” for those companies seeking this license. This includes companies developing wallets, exchanges or those issuing non fungible tokens (NFT), for example.
The application for the license will cost $10,000 and a one-time annual fee of $2,000. In addition, all companies offering services will be required to implement Know Your Customer (KYC) protocols.
Two “structures” for Bitcoin mining
Chapter five of the proposed law exclusively covers the topic of cryptocurrency mining. The activity is divided into two structures: low-scale and high-scale. The former includes those miners who make a profit of no more than $50,000 per year.
This structure is for miners who work in their homes and not in sheds or commercial premises. In this case no license will be issued, but the entity must make a 15% payment on net profits.
The high scale will be for entities that obtain more than 50,000 dollars as annual profit. For these cases the legislative proposal states: “such activity will be carried out only in commercial premises, and the use of domiciles will not be allowed. The miner is obliged to make an annual income tax return and will pay 25% of the net profits from mining”.
Congresswoman Cenobia Vargas presented the proposed law that will be debated in the National Assembly. Source: @asambleapa / Twitter.
The initiative was formulated by Deputy Cenovia Vargas on August 17 and includes guidelines to attract foreign investment among mining companies. Those corpo
rations that decide to install their equipment in Panama will have tax incentives if they hire local personnel.
Renewable energy for mining cryptocurrencies
In a second draft presented by Joseph Isaza, this time dated August 25, several aspects are raised to regulate Bitcoin mining. The document talks about mining with renewable energy and possible benefits for investors.
Among the requirements that the country would demand from miners are: use 50% renewable energy and hire at least five Panamanians in their facilities, among other guidelines. It is not clear if there is a minimum investment amount for Bitcoin mining, but the licensing method would be used to operate in Panamanian territory.
“The Panamanian State may grant concessions that are for the benefit of these investors and the community where such economic activities are carried out. The Ministry of Commerce and Industries and the General Directorate of Revenue will recognize the Investment of cryptocurrencies as an economic activity,” the bill reads.
Panama joins Paraguay and El Salvador as Latin American nations that have shown an approach to Bitcoin. In the latter, adoption would be much higher as bitcoin will be recognized as legal tender, as reported by CriptoNoticias.