Panama Takes a Step Forward in Regulating Cryptocurrency Use

A New Era for Cryptocurrency in Panama

Panamanian congressman Gabriel Silva has announced a major breakthrough in the country’s stance on cryptocurrency use, following the passage of a bill regulating its application. The legislation, sponsored by Silva, marks a significant shift in Panama’s approach to digital assets and paves the way for increased adoption.

Key Provisions of the Bill

• Free Use as a Means of Payment: The bill allows for the free use of cryptocurrencies such as bitcoin as a means of payment, without making them legal tender.
• Regulation of Digital Asset Companies: The legislation permits digital asset companies to operate in Panama, allowing them to set up shop once it becomes law.
• Taxation of Cryptocurrency Assets: The bill treats cryptocurrency assets as foreign-source income under Panama’s territorial taxation system, exempting capital gains from tax.

A Welcomed Approach

Local crypto entrepreneur Felipe Echandi, who assisted Silva in drafting the legislation, has welcomed the approach. “This policy respects our existing tradition of only taxing income generated within our borders,” he explained. “Given that the internet knows no geographical boundaries, this aligns with international practices.”

Next Steps

While President Laurentino Cortizo still needs to sign the bill into law, its unanimous passage through the Panamanian congress suggests a high likelihood of it becoming law. The legislation is seen as a significant step forward in Panama’s regulatory approach to cryptocurrency use.

This development is likely to have far-reaching implications for the growth and adoption of cryptocurrencies in Panama. With a clearer regulatory framework in place, digital asset companies can operate with greater confidence, and citizens can explore the potential benefits of this emerging technology.