Panama Joins In Legalising Bitcoin & Crypto
Hot on the heels of the announcement that the Central African Republic would legalise bitcoin as a legal tender currency it looks like other smaller countries are also looking to jump on the bandwagon.
When El Salvador pulled the trigger we heard rumors of countries in the region like Paraguay and Guatemala would consider bitcoin, but it looks like Panama has beaten them to the punch.
Panama going full crypto
Unlike El Salvador, Panama is taking steps to regulate cryptocurrency assets and the businesses that use them in the country, in a bid to attract some capital to the central American nation.
Renowned for being tax and offshore business-friendly, Panama has always opened itself to be exploited by big business, so a move like this to provide the entire shitcoin market with free reign in the country is not surprising.
The National Assembly of the country, which is the highest legislative organization in Panama, has taken the first step toward regulating the use of cryptocurrencies with a new law
“Law that regulates the commercialization and use of crypto assets, the issuance of digital value, the tokenization of precious metals and other goods, payment systems and other provisions.”
Vague on details
We don't yet have the full details of the bill and it's still to be voted on and things could change, so at the moment we're all speculating.
Of the details we do have I appreciate the fact that it would be an optional method, so crypto usage would under the terms of his bill, be used with merchants, however, merchants are free to reject payments in crypto.
I am not a fan of forcing people to use anything they don't want to use, so this detail to me is important. Something I think El Salvador and CAR didn't get right.
The other big deal from the bill is the removal of all capital gains on cryptocurrency. I think this is the primary goal of the bill and the rest is just padding. To me, having to capital gains will see many crypto companies flock to set up their base and register there, I am sure US companies will be looking at this with sharks teeth.
In addition, crypto-rich individuals who want to enjoy their gains will probably look to set up in the likes of Panama. This can bring in foreign investment and stimulate spending in the country.
The working bill
So the bill needs to be presented to parliament and if it's approved the president can sign it into law and Panama can start moving towards a bitcoin standard, if they so choose.
JUST IN: Panamanian politicians with the bill to regulate the commercialization and use of #Bitcoin and crypto 🇵🇦 pic.twitter.com/5w3H04IIUM
— Bitcoin Magazine (@BitcoinMagazine) April 28, 2022
Sources:
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Dear @chekohler, I remember that the small countries of the Caribbean and North and Central America are economically dominated by American global corporations.
In particular, Panama is part of the United States because it was created by the United States to occupy the Panama Canal.
If Panama legalizes Bitcoin as a fiat currency, I suspect the US will oppose it.
Did Panama legalize Bitcoin as a fiat currency because it wanted to break free from US economic dominance?
What are the benefits of accepting Bitcoin as a fiat currency in small countries with no manufacturing and low economic independence?
I don't think you can get out of the US sphere of influence and why would you, there's a lot of benefit for individuals, people want to trade with the US, many panamanians move to the US and send money home. I think it's just a move to attract capital, encourage business and tourism, financial choice and freedom doesn't seem to be the focal point here but a byproduct
I agree with you!
By the way, If the small Caribbean and North and Central American countries can't escape US domination, why are they legalizing Bitcoin as a fiat currency?
In my opinion it's all geographical arbitrage, every country is looking for a niche they can exploit, look at India and South Africa, for example, they have a niche others don't have as in English speaking cheap labour, so digital products and services are outsourced to these countries and they create regulation to encourage it
Panama is just extending its current banking services so they can capture a piece of the growing pie of value moving into digital assets. It could be bitcoin or stablecoins as long as they can funnel some of it to their ecomonies
Oh, I remember that the smaller countries of the Caribbean and North and Central America acted as tax havens for the big American corporations.
I don't fully understand your argument, but I suspect that South Africa and India may also have played a role in providing tax havens and cheap manpower and resources for large Western corporations.😅
Hmm, I understand that Panama seeks to profit from its role in trading and storing Bitcoin.
Now it will be easier for shipowners to pay for the transit of ships through the Panama Canal, this will simplify logistics, and the time for conducting trenches will be reduced to a minimum.
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