Panama seems to be following the path of El Salvador and the Central African Republic with respect to cryptocurrency. It lately passed a bill to embrace crypto assets use. Both public and private players may use digital currency as means of payment. It now simultaneously facilitates paying taxes through cryptocurrencies.
The announcement comes asshocking to experts as they fear that the reputation of Panama could be damaged in terms of financial transparency. The country is considered one of the tax havens by the European Union and the new law may worsen financial transparency further.
Panama lawmaker Gabriel Silva said the new law is wider in scope compared to that of El Salvador and the country is venturing into various types of crypto assets including artworks instead of limiting only to the currencies part.
El Salvador passed a bill last year to consider bitcoin as a legal tender. Earlier this month, the Central African Republic passed a similar bill to consider the crypto coin as an official currency of the country.
Panamanian President Laurentino Cortizo is yet to sign the bill that was approved with 38 favoring votes in the assembly. Two lawmakers were absent and no one voted against it.
The Internet has well penetratedthe country where only about 25 percent of the adult population has bank accounts. It is believed the legislation would be helping more to those who have no bank account.
Moreover, the banks can now remove the barriers to cryptocurrency uses and can become a hub for the segment including blockchain services. It is not very clear what role the banks would play in the segment and probably traditional institutions may not adapt to the new services soon.
Panama is located in Central America and bordered by Colombia, Costa Rica, the Caribbean Sea and the Pacific Ocean. Panama City is the capital and the official language is Spanish. People mostly follow Christianity.