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Next month, Panamanian Congressman Gabriel Silva plans to introduce a bill that could potentially spearhead the adoption of cryptocurrencies as legal tender and create tax incentives for crypto-related businesses.
After the President of El Salvador, Nayib Bukele, announced that he was proposing a law to make bitcoin legal tender, Silva tweeted on June 7 that if Panama wanted to become a true hub of technology and entrepreneurship, it should also support cryptocurrencies.
Read this article in Spanish.
“I found the El Salvador project positive, ambitious, interesting and well accepted,” said Silva, adding that he sought to adapt this project to the reality of Panama and to constitute “positive competition”.
This month, Silva and her team will now be collecting feedback from different parties, including lawyers, bitcoin users, crypto-related companies and government officials, the lawmaker told CoinDesk. Panama is the latest Latin American country to debate cryptocurrencies, joining Paraguay and El Salvador, which recognized bitcoin as legal tender earlier this month.
Silva did not disclose further details on the details of the bills, but said he would define its content after discussions with stakeholders.
Panama’s current constitution prohibits the government from imposing only certain currencies as legal tender, Silva said, which could make it easier to incorporate bitcoin as a currency.
Panama, which does not have a central bank, officially adopted the US dollar in 1904 after a monetary agreement between the two countries known as the Taft-Arias.
The balboa, the local currency, also circulates alongside the dollar. It has been the first to be linked to a one-to-one exchange rate since its inception.
Regarding tax incentives, Silva said the country already has programs to attract crypto companies through mechanisms such as work permits and tax exemptions.
Panama already serves as the headquarters for many transnational corporations, which may be linked to its reputation as a tax haven.
In its latest list of non-cooperative jurisdictions published in 2021, the European Union classified Panama as a tax haven along with the Virgin Islands and Seychelles, among other jurisdictions.
Consensus building
Sliva said his party, Bancada Independiente, is an independent and opposition party. But Bancada Independiente has a good dialogue with the ruling party and has managed to agree on previous projects, adding that it will try to discuss the project with different ministries of the central administration, such as the agency of the economy and finance.
Panama is in a different situation from El Salvador, where Bukele’s ruling party has a majority in Congress and approved the bitcoin law with 62 out of 84 votes. “I don’t see this being approved in three days, like in El Salvador, but it can be achieved. There is strong citizen support, but we will sit down with everyone we need, ”he added.
To be approved, the bill must get 36 of the total 71 votes in the chamber of deputies, Silva said, adding that Panama does not have a senatorial chamber. If approved in Congress, the law could be approved or rejected by the president.
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