[2022-04-29] PANAMA ASSEMBLY PASSES BILL REGULATING BITCOIN

[aoluain]

Panama with this news seems not to have gone as far as El Salvador but they are
certainly moving in a similar direction.

Panama definitely see Bitcoin as being a very large entity in future economy and
are looking to tap into the technology while providing their citizens with an alternative
to the traditional banking system because the article states over 50% of the population
do not have a bank account.

https://bitcoinmagazine.com/.amp/business/panama-assembly-passes-bill-regulating-bitcoin-crypto

Some extracts

After the president’s signature, the bill will regulate the usage of bitcoin as payment in the country.

The bill seeks to provide regulatory clarity for the optional usage of cryptocurrencies
as payment in Panama, Silva added. Moreover, the goal is to incentivize foreign companies
to open offices in the Central American country as well as to foster local entrepreneurship in
the cryptocurrency services business.

Personally I like this aspect:

There will be no capital gains tax on bitcoin investments.

[1714784954]

1714784954

[NeuroticFish]

I've read something yesterday on this topic and imho it worth getting quoted here. Basically the "no capital gains for Bitcoin" part is not something so special in Panama.

Panama is a territorial tax system. If you're already a tax resident of Panama, you only pay taxes on assets that are physically located in Panama. This means that crypto assets like bitcoin or ether are not subject to capital gains tax because they do not have a physical location, they live on the internet.

https://bitcoinmagazine.com/business/interview-discussing-panamas-crypto-bill-with-architects

[SFR10]

the article states over 50% of the population
do not have a bank account.

This could be great for BTCitcoin ^{[assuming that their president doesn't veto the bill]}, but I don't think it'd have a significant impact ^{[for now]} with the internet penetration rate of roughly 66%!

• The following part is also interesting:
  
  

  According to an early draft of the bill, many businesses would not need a special license to accept crypto.

[aoluain]

I've read something yesterday on this topic and imho it worth getting quoted here. Basically the "no capital gains for Bitcoin" part is not something so special in Panama.

Panama is a territorial tax system. If you're already a tax resident of Panama, you only pay taxes on assets that are physically located in Panama. This means that crypto assets like bitcoin or ether are not subject to capital gains tax because they do not have a physical location, they live on the internet.

https://bitcoinmagazine.com/business/interview-discussing-panamas-crypto-bill-with-architects

Good point, but I suppose many people would not be aware of that, its good
to have both points ^{no capital gains TAX on crypto, or any investment} highlighted.

the article states over 50% of the population
do not have a bank account.

This could be great for BTCitcoin ^{[assuming that their president doesn't veto the bill]}, but I don't think it'd have a significant impact ^{[for now]} with the internet penetration rate of roughly 66%!

• The following part is also interesting:
  
  

  According to an early draft of the bill, many businesses would not need a special license to accept crypto.

They would have to look at ^{and I'm sure they are} increasing the infrastructure.

It looks like very slow progress... Its easy to forget that not every country is as
developed as Europe, The U.S or Australia for example.

In Panama, internet penetration has been growing steadily over the past couple of years.
In 2019, approximately 63.6 percent of the Panamanian population accessed the internet,
up from 40 percent recorded in 2010. As of 2020, Panama's internet penetration rate
was still below Central America and Mexico's average.

[buwaytress]

Panama's also where Bitcoin... dissidents (I know there are better words) have all decided to go more or less, no? Didn't even McAfee spend some time there? And also where the seasteaders went, some of them? Might have something to do with it (in the same way the Miami conference guys had something direct to do with El Salvador).

So I wouldn't say it's good or great news, it's definitely not bad news.

[DaveF]

I think you are going to see more and more of this as time goes on, till it's no longer news.
More and more countries are going to be rolling BTC, and other cryptos into the fold.
For now it's going to be the smaller ones with less financial regulations anyway since it's quicker and simpler then doing it in a very financially regulated way.

HOWEVER, I still see the issue of it not helping other BTC users outside of the potential price bump, since unless you have a lot of money or crypto, having your finances in another country is just not reasonable most of the time.

-Dave

[PrimeNumber7]

HOWEVER, I still see the issue of it not helping other BTC users outside of the potential price bump, since unless you have a lot of money or crypto, having your finances in another country is just not reasonable most of the time.

Outside of the price bump you mention, when more people are using bitcoin, it will generally cost more for each person to get a transaction confirmed due to the limited amount of blockspace available. Although this should eventually lead people to using layer 2 solutions such as LN.

For now it's going to be the smaller ones with less financial regulations anyway since it's quicker and simpler then doing it in a very financially regulated way.

I understand that Panama is generally regarded as being a tax heaven. It is certainly a destination for people to park their money.

[Despairo]

There's a new update Panama pulls back to regulating Bitcoin because the president want compliance about the AML laws [1] at least they're a Bitcoin friendly country since most of the banks accepting Bitcoin source. I guess the president just don't want to hurry up to regulating Bitcoin, because if he worried about money laundering, any centralized exchanges can ask KYC and they will know the clients face, location etc. Though it's possible to hide his location and trace by using mixer with decentralized exchange, but you need to understand the whole part of privacy stuffs.

[1] https://bitcoinist.com/panama-pulls-back-on-legalizing-crypto/