Panama’s National Assembly on Thursday approved a measure that will govern the use and marketing of crypto assets in the Central American country known for its offshore financial services hub. The bill allows both private and public use of crypto assets, as well as paying taxes with cryptocurrency. Experts feared this would tarnish Panama’s image as a country lacking in financial transparency.
The bill covers the trading and use of crypto assets, the issuance of digital securities, new payment systems, and the tokenization of precious metals. Tokenization occurs when the rights to an asset are converted into digital formats. Under the new legislation, Panamanians can use crypto assets as payment for any civil or commercial transaction not prohibited by the law of the country.
According to independent member and promoter of the bill Gabriel Silva, the legislation is broader in scope than the provisions passed by El Salvador, which made bitcoin legal tender last year. “Many types of crypto assets, such as works of art, are emerging,” he said. “That’s why we didn’t want to limit ourselves to just cryptocurrencies.”
Panama is on the European Union’s list of tax havens, and Romain Dromard, chief executive of financial investment advisory firm K&B Family Office, says the proposed crypto bill won’t help it appear. more transparent. “Panama was already in a bad position and these payment methods ignore the due diligence processes that international organizations are asking Panama to adopt,” he said.
The bill could also make banks that have created barriers to using cryptocurrencies more cooperative, said Jose Fabrega of CryptoSPA, a hub for crypto and blockchain services. Still, K&B’s Dromard said the role banks will play under the new rules is unclear and predicts it will take years for traditional institutions to use the assets. Moreover, small and medium-sized companies could not switch to such volatile assets, he argued.
The bill, which now goes to President Laurentino Cortizo for signing, passed the assembly with 38 votes in favor, two abstentions and no votes against. Belisario Castillo Saenz, chief executive of tokenization firm Feänor Corp, argued that crypto assets could help the unbanked, given that internet penetration is high in Panama, but only one in four people have bank accounts.
Summary of news:
- Panama has approved legislation that allows the use of digital assets
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