Bitcoin Legal Tender in Panama

[NeuroticFish]

It's important to note that legal tender is not possible in Panama as the constitution doesn't allow such status to any specific currency. In Panama we use the dollar (due to heavy American influence and economic stability) as our main currency but that doesn't mean it is legal tender.  Bitcoin will now be, in theory, in the same situation as the dollar. This law will not force any party to use anything unless they want to. Therefore, the adoption dynamics are going to be fully (in theory) dictated by the market.

https://www.reddit.com/r/Bitcoin/comments/ue8f8s/panama_bitcoin_bill_are_zero_taxes_better_than/i6mfu8d/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3

For now Wiki shows PAB and USD as currencies in Panama, but not Bitcoin.

I've also read today (but sorry, I cannot find it now) that the Bitcoin-as-legal-tender may have not passed yet?
Also the English text in OP tells:

Panama will venture into the legalised digital economy in the initiative of Law 697

[1714052500]

1714052500

[1714052500]

1714052500

[1714052500]

1714052500

[fillippone]

For now Wiki shows PAB and USD as currencies in Panama, but not Bitcoin.

I've also read today (but sorry, I cannot find it now) that the Bitcoin-as-legal-tender may have not passed yet?
Also the English text in OP tells:

Panama will venture into the legalised digital economy in the initiative of Law 697

I can confirm that. To be fully effective the law needs to be signed by Panama’s President Laurentino Cortizo. Only when it is signed the law will be in full effect and able to produce an impact.

[Lucius]

Interesting, it seems that Panama is more into attracting the foreign investors rather than accepting the bitcoin locally.
~snip~

They definitely have a different approach than El Salvador and they clearly define that in their strategy :

Echandi: We believe that they’re totally different efforts and they’re trying to solve completely different problems. El Salvador, we think, is a massive push toward Bitcoin adoption specifically, because it mandated adoption of bitcoin as legal tender. In Panama, that would be unconstitutional. We can’t force anyone to take a specific currency because we have monetary freedom established in the constitution.

In other words, anyone who wants will be able to use Bitcoin completely legally, and this will by no means be an obligation, as is the case in the ES when it comes to all legal entities. Panama is likely to be much more attractive to investors because of its very favorable tax laws than Malta, Gibraltar, or perhaps Madeira, which each wants to become a kind of crypto paradise (or at least have had such plans in the past).

[Silberman]

I am not so sure I am understanding this correctly, but even if the legislation that was passed at Panama seems to be very positive and favorable for bitcoin, it does not really give it legal tender status, bitcoin can be used as a currency and businesses are free to accept it, but it is optional, however if bitcoin was legal tender then businesses will actually be forced to do accept it, but in any case this is a good enough law and the fact that you do not have to pay capital gains on your bitcoin earnings will be very attractive especially for the whales that can relocate themselves to Panama.

I do share your doubts, and I agree in principle that the meaning of “legal tender” as known in the “civil law systems” is closely resembling to what you stated above: law imposes over the free will of individuals forcing them to accept a specific currency.

In Panama things work in a slightly different way.
...

I have also read a little bit about it and it seems that for what I have read Panama is unable to confer legal tender status, but the post of Rikafip may seem to call that into question, however it seems Panama has taken an approach similar to what we saw back then when merchants still used gold coins, instead of forcing each other to use a gold coin minted by a single government merchants knew the weight and the purity of each coin, so they just accepted the coins minted by the governments and transacted with each other with no problem by willingly accepting on their own all of those coins.

(do you think my posts come out of copy and paste??)

I would never make such a baseless accusation.

[Rockstarguy]

Nice one Panama, bitcoin is really growing. Recently central African Republic adopted bitcoin as currency and am getting to hear the same news about Panama adopting bitcoin as legal tender, I can't wait to hear good news like this from top countries. We are about to round up the first quarter of the year and we have had several news about several countries accepting bitcoin , by the time the year runs out more countries will accept bitcoin.

[fillippone]

I tried to find some more  info about status of US dollar in Panama and this is what I found on the website of some Panama bank, and similar thing (dollar being legal tender) is stated on Wikipedia. Too bad we don't have anyone from Panama active here (I guess) to clear this out.

Use of the U.S. Dollar in the Republic of Panama

By express mandate of the Law, it is the obligation of every business, including banks, to accept US paper currency in all denominations.

In this regard, Article 1171 of the Fiscal Code establishes that:

Article 1171: The currency of the Republic of Panama will be the Balboa, which is a gold coin with a weight of nine hundred eighty-seven and a half milligrams (0.9875) and a purity of eight hundred twenty-nine thousandths (0.829), divided into one hundred hundredths (100/100).

The current United States Dollar and its multiples and fractions shall be legal tender in the Republic of Panama, with a face value equivalent to the respective Panamanian currency."

They definitely have a different approach than El Salvador and they clearly define that in their strategy :

Echandi: We believe that they’re totally different efforts and they’re trying to solve completely different problems. El Salvador, we think, is a massive push toward Bitcoin adoption specifically, because it mandated adoption of bitcoin as legal tender. In Panama, that would be unconstitutional. We can’t force anyone to take a specific currency because we have monetary freedom established in the constitution.

In other words, anyone who wants will be able to use Bitcoin completely legally, and this will by no means be an obligation, as is the case in the ES when it comes to all legal entities. Panama is likely to be much more attractive to investors because of its very favorable tax laws than Malta, Gibraltar, or perhaps Madeira, which each wants to become a kind of crypto paradise (or at least have had such plans in the past).

In Reddit I got an answer that reiterates the view about the Constitution:

That's probably either a bad/outdated/conflicting interpretation of the law indeed. The constitution (which is the ultimate law of the land) currently says the following:

Article 262: "No habrá en la República papel moneda de curso forzoso" which roughly translates to "There won't be a forced paper currency in the Republic". This means that no specific currency shall be enforced.

Article 1171: The currency of the Republic of Panama will be the Balboa, which is a gold coin with a weight of nine hundred eighty-seven and a half milligrams (0.9875) and a purity of eight hundred twenty-nine thousandths (0.829), divided into one hundred hundredths (100/100).
If you pay close attention. This is specifically talking about a Balboa gold coin. This used to be a thing that was minted a while ago. I used to have one but it is very rare. This gold coin was not pegged to the dollar (clearly as that doesn't make sense). Maybe that's where the confusion is coming from. Also we technically call our currency Balboa but what we actually use is the US dollar. All our physical cash (with exception of some coins) is actual US dollars.

The current United States Dollar and its multiples and fractions shall be legal tender
This is the translation that was chosen probably due to its simplicity but it does contradicts the constitution. This probably just means that the dollar is legally allowed (but not mandatory) to be used. We need the current text (in Spanish) from the fiscal code to verify.

https://www.reddit.com/r/Bitcoin/comments/ue8f8s/comment/i6o5840/?utm_source=share&utm_medium=web2x&context=3

So yes, this is basically saying the legal tender is determined by the market, not by law. They state that the information on the banking website can be misleading (this seems strange to me, honestly) but they might want to discourage customers from depositing any currency but dollars (they might not interested in getting PLN or HUF, or possibly CHF).
But I am only playing the guessing game here.

[stompix]

Too bad we don't have anyone from Panama active here (I guess) to clear this out.

As always, we don't have anyone from Salvador, nobody from CAR, but I'm used to it, we didn't even have anyone to translate the CCB statements from Chinese back in the days. Probably this will be the indicator for the next country that does something big when it comes to Bitcoin, it will be a country with no subforum on bitcoinktalk  

Back to the news itself:

Echandi: ~ We can’t force anyone to take a specific currency because we have monetary freedom established in the constitution.

So, we couldn’t even consider driving adoption in that manner. So, what’s the problem we’re trying to solve? First, we want people who deal with crypto to feel safe here, to provide a location that is open to the cutting edge of the internet. Second, if you’re creating a platform that is decentralized and taking custody of funds, the rules should be clear for you and they should be competitive. They should also mitigate the risks that normally exist with that. Third, if you’re doing something in the decentralized finance (DeFi) space, the rules should also be clear to you.

I love this, this is how things should be done.
Not declaring overnight every business needs to adopt this, not forcing merchants to accept it, not forgetting to tell them they will need a bank account to instantly convert those BTC is they want $ and they will have to use a bank or an atm to get the cash, and so on and on.
On top of that, not spending government money trying to boost popularity!

Bitcoin means freedom and bitcoin should not be imposed, if you're forcing this I see it just as an attack on freedom.
With this move you respect everyone's decision, if they want to use it they will use it if they don't they won't, it's just like how shops are allowed to operate and choose what they are willing to accept, it's either "no cash" or "no cc' or "no checks". Boosting all day long about buying the dips, giving away millions in airdrops, using a government centralized platform for this, issuing bonds for some city that will never be built, this is not about bitcoin usage and freedom those are politicians' publicity stunts.

One thing, we had three countries to date, none of them had actually their own free floating currency, interesting pattern.

LE:
And of course, the price keeps dropping, the first time I was checking it today and as usual, again down -2,74% last 24h, I'm starting to wonder if we might need some country to ban bitcoin in order for it to go up!

[Renampun]

This way is much better than forcing it on the people of panama,

Keep remember Bitcoin is a freedom, anyone have their own choice to use or not. It's a right move from Panama giving an optional for businessman and their citizens to use Bitcoin. Take a look with El Salvador, even their president doesn't force them to use Bitcoin, but many people e.g. retires still protest against Bitcoin.

That's right, according to satoshi's goal of creating bitcoin which is for freedom...

a good step from the panama government not to force their citizens to use bitcoin and give their citizens a choice whether they want to make bitcoin an alternative transaction and investment or not. With this news, I see that the big countries are a little behind from Panama and El Salvador.

[ShowOff]

Yes, this is great news but according to the research I did and the content provided by the OP. Bitcoin was not legal tender in Panama but it was signed and as a legal payment method.
Read this message which was translated by the OP.
"Panama will venture into the legalized digital economy" and "This action of the deputies opens the doors to bitcoin (BTC) and cryptocurrencies, proposes to give legal stability to these digital elements, in addition, it is made explicit that the proposal does not oblige the use of bitcoin as a means of payment because it is presented in an optional"
They never said Bitcoin was legalized as legal tender.

Does that mean Panama is only legalizing bitcoin as legal tender but not as legal currency?
Whatever the legality of bitcoin there, I think that is big news that needs to be welcomed by the "bitcoin" crypto community around the world. Over time adoption is getting better and this gives us hope about a good future to hold bitcoin for a long time. If Panama succeeds in doing so, then we can also expect other countries to follow suit in the near future.

[marcus_of_augustus]

To understand what is happening in a Panama you must first realise that they have monetary freedom enshrined in their constitution. This means NO currencies can be legal tender.

Panama has no central bank either. By de facto the majority of the population currently bank and transact in USD. And there are no capital gains on USD appreciation. And there are no capital gains on appreciation of any other 'lawful currency' used for transacting or accounting purposes. Panama has a version of what is known as the 'free banking' model in monetary economics.

However not just any old token can be used as a 'lawful currency'. Major national currencies like USD, EUR, CHF, YEN, etc are all able to be used as 'lawful' currencies in the Panamanian banking system. But they cannot use Chuck-E-Cheez tokens or Canadian-Tyre tokens.

It appears that Bitcoin will be given 'lawful currency' status in Panama by this new bill which places it on par with other international currencies used there.

NOT 'legal tender' but 'lawful currency'. This is the ideal situation imho.

[ajochems]

Legalised of bitcoin was sounds good,but their was a doubt of how much it will works.Because the El people moves create this opinion to me.It was total twist in that country.The bad one of the El government was,they had forced to use of the bitcoin.But here panama had just make the bitcoin as a legal tender.So hope their will be some good response among the people of panama in the bitcoin price.

[Nerdy doctor]

This is great news. I recently heard about the Central African Republic adopting btc as a legal tender which you can transact commerce and pay taxes with and now Panama is doing same.
I think the adoption would be more successful in Panama cause of the volatile situation going in in the African nation. Panama itself is an ideal spot for bitcoin as it favours cryptocurrency.
This is the slow gradual adoption of bitcoin worldwide and I'm loving it.

[Zlantann]

Some folks around me kept asking me why is that the countries that are adopting bitcoin as legal tenders are developing nations. They argue that bitcoin would remain a financial underdog. I simply told them that it is only the sick that needs  physicians. These nations have simply discovered a remedy for some of their financial woes. CAR recently knew that they were dealing with the wrong physicians and they needed to change. And the wrong doctors are unhappy that the patient is now seeking an alternative cure. Bitcoin adoptions recently might be insignificant to skeptics, but El Salvador, Central African Republic and Panama is a huge win for bitcoin. Bitcoin adoption might not be the total cure of these nation's economic challenges, but it is a positive option.

[Pomogator]

Legalised of bitcoin was sounds good,but their was a doubt of how much it will works.Because the El people moves create this opinion to me.It was total twist in that country.The bad one of the El government was,they had forced to use of the bitcoin.But here panama had just make the bitcoin as a legal tender.So hope their will be some good response among the people of panama in the bitcoin price.

Most likely, nothing will change much in Panama in the coming year. Perhaps within a few weeks after this news there will be some changes, but then everything will go into decline. A large number of countries are needed for a full-fledged global cryptocurrency system. Now you should not hope for any strong changes in the world.

[aysg76]

It's really good to see another country taking friendly step ahead for legalizing bitcoin and Panama has done this in reality.There were rumours around for it but now the smoke has been cleared with passion of the bill but however i see some misconceptions over the net and Twitter also where people are assuming that BTC is legal tender in Panama which is not so true.

In actual case they have legalised the use of bitcoin payments in the country with passing of the bill and the best thing I liked about is 0% capital gain tax over it but the bill is still to be signed by the President as cleared by this tweet also :



But still it's good approach as Panama might be changing some rules giving it legal status in future but according to me if you are free to use bitcoin as payment system which is the base model for it then it's much better.The Panama's 50% population don't have a bank account and this could be game changing for them if they accept it.We have seen many people strikes and protest in El Salvador when it passed the legal status law.Hope people understand it and at last btc is free money but we can't impose it on people as it dematerialise the whole concept of freedom.

Speaking of US dollar then you can easily use it in Panama without even exchanging it as foreign currency as it's used in coexistence with the Panama legal currency Balboas in ratio of 1:1 which means 1 Balboas is equal to 1 USD .

. Since 1904 one Balboa equals one US Dollar and since then, the US Dollar has legally circulated in Panama. In other words, in practice, the currency used day-to-day in Panama is the US dollar, which is also legal tender. For this reason, Panama is considered a dollarized country and was the second economy in the continent to become a dollarized economy. Currently there are Panamanian coins that have the same weight, dimension and composition of the coins used in the USA (1, 5, 10, 25 and 50 cents). Panama also has its own $1 coin. For paper money, only the US Dollar is used (there are no paper Balboas).

For more details head to this file to check out the Dollarised economy Panama

This image speaks thousand words if you clearly understand it from depth :



The world is recognising the importance of bitcoin and how could it embrace themselves to rise against poverty to some extent and counter inflation.But still many will oppose this in fear of just losing control out of their hands but there are more important things than this.

The Bukele speculation about two more countries following the same step are turning out to be true slowly as @fillippone's thread about various countries accepting btc increases so hope this projection goes on mass scale soon.

[Lucius]

But I am only playing the guessing game here.

Some things are clearer considering the posts that shed light on some things, but sometimes it is not easy to figure out how the laws are formulated and what exactly they refer to. Panama is definitely a very interesting case and an environment in which Bitcoin will be in a position to show what it can offer in relation to fiat currencies.

One thing, we had three countries to date, none of them had actually their own free floating currency, interesting pattern.

For me quite expected, because if you do not have your own national currency, it is very easy to add Bitcoin as one of the options. However, I emphasize as one of the options - because Bitcoin is only an alternative, even in the ES, which imposes it as a legal tender, but with the choice of everyone to use the USD.

LE:
And of course, the price keeps dropping, the first time I was checking it today and as usual, again down -2,74% last 24h, I'm starting to wonder if we might need some country to ban bitcoin in order for it to go up!

I wouldn't say that this kind of news is not good, but people have realized that it is no longer something that can move the market in a positive direction. On the other hand, a war that could escalate into anything more than a conflict between the two countries at any moment, and unstoppably rising inflation certainly affect the way investors think when it comes to investing in Bitcoin.

[ivankoh]

In fact, since Panama has wanted to legally bid for bitcoin since 2021, its crypto laws have been reviewed in accordance with the country's economic circumstances and conditions.  They have certainly been closely monitoring the situation and moves from El Salvador.  If they do end up becoming a very ideal standards( Technology Center) development organization in Latin America.  But it seems a bit rushed because when it comes to news they accept cryptocurrencies for payment.  Need to wait for the final approval result.

Most likely, nothing will change much in Panama in the coming year. Perhaps within a few weeks after this news there will be some changes, but then everything will go into decline.

The strength of bitcoin is sovereignty and ideology.  It won't affect the value all of a sudden.  What are you hoping for the best for bitcoin???

One thing, we had three countries to date, none of them had actually their own free floating currency, interesting pattern.

Will we mention Brazil or Cuba there?  It will definitely be interesting

[Bitcoin2009]

A good step for Panama to immediately follow el savador who succeeded in legalizing bitcoin, I'm sure many citizens will benefit greatly from the legalization of bitcoin, and of course this makes us more optimistic about the future of bitcoin.

[doomloop]

I wouldn't say that this kind of news is not good, but people have realized that it is no longer something that can move the market in a positive direction. On the other hand, a war that could escalate into anything more than a conflict between the two countries at any moment, and unstoppably rising inflation certainly affect the way investors think when it comes to investing in Bitcoin.

Such a news does not really move the market, although I would say it is because that the countries that has been adopting cryptocurrency so far are not really like the big countries in the world, and is just some small countries, which is El Salvador, Central African Republic and Panama. So, these countries are not really like the world powers, and are just smaller countries.

So, their adoption is not really making any impact at all. Let’s say for example that the US decides to adopt it as a legal tender, I believe that it will really have an effect in the market for sure.

[stepwilli]

It’s good to see how countries are now starting to realize that Bitcoin is a good currency and they are also adopting it. I’m also looking forward to when other countries around the world will start adopting Bitcoin, it’s really going to push up the price and also move the community ahead.

Apart from Panama, and El Salvador, Central African Republic is another country that have also adopted Bitcoin as a legal tender that as of recent. So, right now we have three countries that are fully supporting cryptocurrency. BTW, in Panama, people are not obligated to make use of Or accept cryptocurrency, so it's not like it’s a real legal tender in the country.