The official Twitter account of the National Assembly of Panama announced that the legislative body has passed a law to regulate the Bitcoin and cryptocurrency markets in the country.

The law is quite broad as the regulation covers quite a few facets of the crypto industry. As per the tweet, this law will regulate, the commercialization and use of cryptocurrencies, trading, the issuance of digital value, the tokenization of precious metals and other goods, payments systems, as well as dictating other provisions.

In a Thursday interview after the bill got approval Congressman Gabriel Silva said, officials are hoping for this bill to convert Panama into a technology innovation hub in Latin America. This step will support mobilizing the economy and creating jobs. Silva further added that the bill will provide regulatory clarity for the optional usage of cryptocurrencies as payment in Panama. Moreover, foreign companies will be incentivized to start offices in the Central American country and to grow local entrepreneurship in the cryptocurrency services business.

Now on the desk of Panamanian President Laurentino Cortizo, the bill will reach where he has the option to veto the proposal or sign it into law. It is expected that country’s president, Nito Cortizo will sign it.

Country officials hope to encourage innovation and boost the economy with the law and take the burgeoning industry out of a current gray zone. Some say that it will help Panama become a hub for innovation and technology in Latin America which shows that officials are focused on creating an environment of innovation.

Silva said more than 50% of the population of Panama doesn’t have a bank account. Hence, people participate in the digital economy and receive payments from tourists that come to Panama. It helps in the financial inclusion of Panamanians.”

In the Panamanian economy, a framework is there for the usage of bitcoin and cryptocurrencies as payment methods. Although the country didn’t make bitcoin a legal tender.

Panama joins a growing list of countries that are passing laws to regulations of cryptocurrencies. Most of them are happy to allow crypto so long as it complies with AML and KYC laws, and investor protection measures. In the world, El Salvador became the first country to adopt bitcoin as a legal currency last year. Yesterday the second nation became the Central African Republic.  Recently, the United States has announced efforts to regulate crypto. China has outright banned crypto and India expressed the need for global cooperation to prevent illicit activity.

Indrani Bose

CBW - External Analyst

INDIA