The end of last month brought with it an exciting development that might seriously affect every aspect of the economy in Panama. Namely, the nation’s legislative assembly has passed the crypto law bill – a bill related to the treatment of cryptocurrency by Panama. This has brought on a slew of different positive and negative reactions. However, this is not the end of things yet! President Cortizo has still not ruled either in favor or against the bill. So, what are the chances that Panama passes crypto law bill? And what are some good and bad sides to the current crypto law bill?
What does this mean
In simple terms, ‘Panama passes crypto law bill’ means that the bill goes to the President to review, and he decides whether to sign. However, if the bill does pass this second hurdle, it will mean significant changes in the country. It may already be possible to buy, sell or trade Panama real estate using crypto. However, setting up a digital assets company in Panama is illegal right now. In addition, the bill covers all trading and use of crypto assets, including the issuance of digital securities and even the conversion of precious metals into cryptocurrency. It will even be possible to use cryptocurrency to pay taxes. And even any commercial operations approved by the country. All of this encourages and develops the crypto industry. As well as ‘gives legal stability’ to crypto assets in Panama.
Get ready for an influx of foreign currency
If Panamas president passes crypto law bill, the first benefit will be the influx of ‘foreign currency,’ which crypto qualifies as. Now, remember that crypto assets are a relatively broad term. It applies to all the different ‘currencies’ set up by foreign companies, such as Bitcoin. Yet, it also applies to NFTs and even various other types of digital art. However, they all have inherent value and can be seen the same way as real-world precious metals. Their worth may change, but they are meant to be a relatively stable currency – the influx of which should only be beneficial to the country in the long term.
Lower taxes
Income received overseas qualifiers for zero taxes, including yes.. capital gains, but what will likely appeal to all citizens of the country is the fact that if Panama passes the crypto law bill fully, then cryptocurrency will fully be treated as a foreign currency. That, of course, falls under the foreign-income clause and ensures they fall under the no taxes on capital gains law, which is a great break for all citizens of Panama! It’s precisely this benefit that makes people think about moving from the US to Panama and hiring international movers to leave the US for good. For many people, moving to Panama is a reasonable financial decision, and if that’s the case, you shouldn’t wait to hire the top international movers and be on your way.
Uncharted waters
Not everything will indeed be perfect if Panama passes the crypto law bill. The first and most apparent fear stems from the instability of cryptocurrency. Is the situation slowly improving when it comes to this matter? Yes, admittedly so. However, the value of crypto is still fluctuating. And people have suffered severe losses in the past. With more and more governments being interested in crypto, we can hope that things will slowly stabilize and crypto will get as reliable as officially issued currencies. But right now, that’s not the case at all. So, if you are planning to sell your Panama property for a crypto we suggest using a trading asset platform through Idoneus Panama, so you dont have instability with current market exchanges.
Word from the President
The ball is now firmly in President Laurentino Cortizo’s court. For Panama to pass the bill fully, he needs to sign off on it. And he has already come out with a statement claiming that he will likely not approve the bill’s current iteration. According to the man himself, he “has to be very careful if the law has clauses related to money laundering activities.” Since “anti-money laundering activities are very important to us.” However, the President has also claimed that he believes “it is an innovative law” and that the only thing holding him back is damaging the solid financial system in Panama. If global regulation of crypto-assets became more strict, the President would likely immediately approve the bill. His care is not unusual, considering this bill affects all aspects of the economy, including Panama real estate.
The President, Nito Cortizo has rejected the new bill in recent days saying there are admittedly more significant and severe drawback of this bill passing, as it needs have stricter anti money laundering standards as Panama attracts a lot of investors and foreign business people. Even the moving experts from Hansen Bros. Moving & Storage like to emphasize how much they are looking forward to receiving many calls for relocation moves to this country due to the possibility of the crypto law. This bill would give crypto exchanges the ability to operate in the country which the President thinks needs be studied more with oversight and regulations for digital economy. If the bill is not handled carefully, it can damage the foreign investors’ trust in Panama’s reliability.
The reactions
So far, the reaction to the bill passing 40-0 has the first round of scrutiny by the nation’s legislative assembly. On the one hand, the potential of crypto cannot be denied. On the other, there are apparent fears and concerns we have already touched on regarding regulation. This has naturally caused a bit of a divide between some, including the United States Federal Government which keeps a close eye on the Panama economy and the US Dollar, and the race to sovereign digital currency. Still, the general consensus is that people are cautiously optimistic. Even those who do caution against the bill are only looking for tighter regulations and more concrete laws preventing malpractices. In the end, with Panama being rated the top retirement destination in 2022 and with the country’s appeal to foreign investors, if the bill is handled well, it will only bring greater prosperity to Panama and its residents.
In the end, its only inevitable that President will have to sign the bill, especially if the country wants to compete with other financial hubs such as Switzerland and Dubai, which area already approved similar if not better crypto laws. But, as can be surmised from everything we’ve discussed, the chances of this happening eventually are overwhelming. It is only a matter of time and how the bill will change before it is actually passed.