Panama Touts Bitcoin and Ethereum in New Crypto Law
Central America’s bitcoin adoption is on the rise, with Panama the latest country to flock toward cryptocurrencies. The development has unfolded on the very same day that El Salvador officially accepts bitcoin as legal tender. Now the Republic of Panama is moving in the same direction but is putting its own personal touch on the roll-out by also embracing Ethereum and other cryptocurrencies as well.
Panama has unveiled a cryptocurrency law in draft form, as announced by Congressman Gabriel Silvaon Twitter. Similar to El Salvador, Panama wants to make bitcoin as well as Ethereum more popular as a payment method. Panama’s lawmakers also want to support the use of the blockchain in the public sector as well as use the technology in its banking sector.
The bill explains how Panama is compatible with the digital economy, including the blockchain crypto assets and the internet. The bill roughly states,
“Today we present the Crypto Law. We seek to make Panama a country compatible with the blockchain, crypto assets, and the internet. This has the potential to create thousands of jobs, attract investment and make the government transparent.”
Hoy presentamos la Ley de Cripto. Buscamos hacer a Panamá un país compatible con el blockchain, los criptoactivos y el internet.
Esto tiene el potencial de crear miles de empleos, atraer inversión y transparentar el gobierno
— Gabriel Silva (@gabrielsilva8_7) September 6, 2021
Prices Under Pressure
Despite wider-scale adoption of bitcoin and Ethereum, most of the broader cryptocurrency market is trading in the red today. The bitcoin price continues to hold $50,000, while Ethereum could be gearing up for a run toward $4,000.
The draft legislation touts bitcoin as a hedge against inflation and points to its divisible nature, saying that it can be “subdivided into 100 million Satoshis” as an example. It also acknowledges other cryptocurrencies including Ethereum and Cardano for similarly being divisible into more assets than traditional investments lend themselves to.
On social media, users were quick to point to the fees associated with Ethereum transactions in particular. The average Ethereum transaction fee currently hovers at just under $40, compared to more than $50 in early September.
Panama is keeping it loose and is not requiring merchants to adopt bitcoin or any other cryptocurrency. That was a key criticism of El Salvador’s bitcoin roll-out, in that merchants and consumers alike felt forced to suddenly adopt bitcoin as the currency.
According to Silva cited by a local publication, Telemetro, the new bill “does not oblige and does not seek to impose digital currency, or forced means of payment, but the freedom to use cryptocurrencies such as Bitcoin or Ethereum.” This could make all the difference so that Panama avoids the protests that broke out in El Salvador amid a lack of understanding about bitcoin.