The people of Panama may soon be able to buy their morning brew with Bitcoin: the country’s legislature just approved a bill regulating the use of cryptocurrencies in the country.
Now, the bill just needs to be signed by the country’s president before it comes into force. The “Crypto Law” states that it “regulates the trading and use of crypto-assets, the issuance of digital value, tokenization of precious metals and other assets, payment systems and other provisions.”
According to Congressman Gabriel Silva, it will help the Central American country—and tax haven—“become a hub of innovation and technology in Latin America.”
The idea, according to the bill and Silva, is that Panamanians will be able to buy everyday goods with cryptocurrency, if they want to.
“Today I can go and pay for something to a merchant, and if the merchant wants to accept crypto, it's allowed, it's legal. Until today, that didn't exist in Panama, we are making it happen,” said Silva in an interview with local media. He added that over 50% of Panamanians were unbanked and the Crypto Law would help them.
The law stipulates that cryptocurrencies will now be a valid form of payment "for any legal civil or commercial operation," including the payment of taxes, fees, and duties to the government. A full list of acceptable cryptocurrencies will be forthcoming, but for now the law highlights Bitcoin, Ethereum, XRP, Litecoin, and Stellar, among a handful of other coins.
But the law will be different to El Salvador’s Bitcoin Law: in El Salvador, which made Bitcoin legal tender last September, a business must accept Bitcoin if it has the technological means to do so, the law states. In Panama, it will be up to the business.
The law also formally recognizes DAOs—decentralized autonomous organizations—as legal entities and sets the framework for the country to issue tokenized securities and commodities, like gold and silver, via security token offerings (STOs). DAOs are an increasingly popular way for businesses to operate in the crypto world, where control is spread out rather than hierarchical.
The law also wants to give the government more power to use blockchain technology, with the “digitization of the identity of individuals and legal entities” to create more transparency.
Jose Lanz contributed additional reporting.
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