Panama Wants To Legalize Cryptocurrencies Via A New Law Proposal

The Republic of Panama may become the latest addition to the countries in Central America, which embrace cryptocurrencies and recognize them as a legal form of payments.

The new law proposal, pushed by Panamanian Congressman Gabriel Silva, may turn digital currencies into an alternative payment method, especially after El Salvador passed such a bill recently.

Silva announced the law proposal via Twitter, noting that the law aims to make Panama a country compatible with the blockchain, crypto assets, and the internet. The Panama Crypto Law should create thousands of job offers, make the government transparent and attract investments from all over the world.

The newly proposed law embraces the rapid growth of internet connectivity in Panama and the way it played a role in boosting the country’s economy. According to the proposed bill, blockchain technology and digital currencies are a vital part of the next phase in Panama’s economic growth, and the country can’t risk to fall behind. Furthermore, the Crypto Law emphasizes that cryptocurrencies are a safe haven place for illicit activities and criminals since blockchains are mostly transparent and immutable.

“In practice, their use for illicit activities is quite low. In 2019, criminal activity using cryptocurrencies only accounted for 2.1% of all cryptocurrency transactional volume, and in 2020 illicit activity using cryptocurrencies dropped to 0.34%, according to statistics from Chainanalysis,” the Crypto Law reads.

Panama’s Crypto Law proposal comes just several days after El Salvador’s Bitcoin Law took effect this week on September 7. The law, however, faced protests, controversy and legal actions as El Salvador’s law requires all economic agents to accept BTC payments, whether they want to or not.

Panama’s law would be more liberal, with digital currency acceptance by merchants being optional, as the bill is recognizing digital currencies as an alternative payment method, rather than being a national currency like in the case of El Salvador.

Meanwhile, Panama’s Crypto Law introduction didn’t manage to shift the sentiment in the crypto sector, with almost all of the top-100 cryptos recording negative price action over the past 24 hours. Bitcoin, for example, slipped 3% to trade just above $45,0000, but its weekly losses are on the 10% mark. Ethereum is down 6% daily, which further adds to the altcoin leader’s 16% weekly losses. Ethereum currently trades at just above $3,300 per ETH. A similar trend is observed across the crypto sector, with only Terra (LUNA), Polkadot (DOT), Avalanche (AVAX), Tezos (XTZ), and a handful of other crypto projects growing both daily and weekly.