Panama Congressman Gabriel Silva Introduces a Crypto Law

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September 7, 2021
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After his commitment to present a bill that could potentially spearhead the adoption of cryptocurrencies as legal tender back in June, Panama congressman Gabriel Silva proofs he is a man of his word.

On Monday, Silva presented his Crypto Law project as he made the announcement in a video. Although Silva surely is a proponent of Bitcoin, his Twitter profile picture has laser eyes, the congressman does not refer to Bitcoin once in the video. It looks a clever move, and while Bitcoin is the top cryptocurrency, a broader approach in which to include the entire crypto space is a much more sophisticated one.

In the video, congressman Gabriel Silva says:

“The bill is quite simple. Firstly, it seeks to give certainty and legal security to crypto assets, such as cryptocurrencies, in Panama. The second thing the project seeks is to attract companies, attract investment, and help foster entrepreneurship in Panama that focus on the digital economy. This is positive, because it helps to promote and create jobs. And the third thing it seeks is to expand the amount of financial services offered in Panama, in order to ensure better prices for everyone ”

Although Silva does not speak about Bitcoin in the video, he does call it out eleven times in the document he included in his Tweet, titled “Crypto Law: What Makes Panama Compatible With The Digital Economy, The Blockchain, Cryptoactives, And The Internet.” Ethereum comes around four times in the article

In his Crypto Law, Silva describes crypto assets as follows:

“Crypto assets like Bitcoin serve as potential long-term investments and shelter against inflation. Crypto assets are also divisible into many more units than traditional assets. In the case of Bitcoin, it can be subdivided into 100 million Satoshis, for example. Systems like Ethereum and Cardano have similar divisibility properties.”

In Article 8, it is stated:

“Natural persons located in the Republic of Panama, or legal persons organized in the Republic of Panama, may freely agree on the use of crypto assets, including without limitation Bitcoin and Ethereum, as a means of payment for any civil or commercial operation not prohibited by the Republic of Panama’s legal system.”

The article is interesting since Panama’s constitution prohibits the government from mandating only certain currencies as legal tender, which could aide the incorporation of Bitcoin as a currency.

With regards to tax, the law seems to propose a 10% taxation on profits, a bit awkward for a country that is considered a tax haven:

“The taxpayer will undergo capital gains treatment and, consequently, will calculate the Income Tax on the profits obtained at a fixed rate of ten percent (10%). The Executive Branch will regulate this matter.”

Bitcoin as legal tender is not a crazy thought as Panama does not have a central bank and officially adopted the U.S. dollar in 1904 after the two countries signed an agreement known as Taft-Arias.

Panama’s local currency, Balboa, goes around alongside the U.S. dollar and is tied to to it at an exchange rate of one-on-one.

There were already some talks back in 2020 about whether to provide a regulatory framework on cryptocurrencies, although it did not come to anything at the time. Nonetheless, it did start something. With El Salvador starting a new era today with Bitcoin as a legal tender in the country, could Panama be the next in line?

The post Panama Congressman Gabriel Silva Introduces a Crypto Law appeared first on iGaming.

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Author: Peter Siu

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