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Panama‘s new crypto law Exempts Crypto Assets From capital gains tax
13 May 16:16
Recently, the Central African Republic joined El Salvador to take bold steps to pass bills that allow cryptocurrency to be used as a legal tender. Now, even Panama, a country where cryptocurrency used to be illegal, has passed a bill to allow the use of cryptocurrency. The bill also excludes crypto assets from capital gains tax to further encourage its adoption. This will positively impact the Panamanian community and cryptocurrency market values in general.
Since the introduction of cryptocurrency, payments and transactions online have been much easier and faster. Due to this innovation, some countries have legally approved the use of cryptocurrencies like- Bitcoin and Ethereum as means of exchange. These coins aid routine transactions on platforms like- casinos, and banks, to mention a few.
The world is fast evolving and adapting to the digital age, and countries have taken it as a priority to benefit from the period's digital innovations. Actions like this prompted the Panama government to pass a bill into their law to regulate the use of cryptocurrencies for transactions. The process took a while to be finalized but eventually, the results favored crypto.
About Panama Crypto Law
Before the new law, the Panama government strongly frowned against the use of cryptocurrencies to make payments and transactions online. Reasons have been that crypto transactions are fluid and cannot be traced, making it impossible for the government to track the assets of individuals. It is believed that cryptocurrency aids cyber thefts, which is false on many grounds.
However, due to recent developments, they will adopt the extensive use of cryptocurrencies. According to the interview with Gabriel Silva- Panamanian Congressman on Radio Panama earlier this week, he stated that the bill to legalize crypto operations has been passed and is awaiting approval by the president- Laurentino Cortizo.
Once the bill has been approved, crypto transactions will become fully legal in the country. Also, Gabriel clarified that for now, the bill is mainly for cryptocurrencies to be used as a means of exchange and not as a legal tender. Clearly, this is a huge step forward for a country that does not have a currency but has adapted the US dollar for over a century.
Speaking on Twitter earlier this week, Gabriel mentioned that although the country adapts the US dollar but does not have legal rights to claim a cryptocurrency like Bitcoin. However, the government projects the acceptance of cryptocurrencies to improve their economy. With the use of crypto assets, citizens can now purchase, sell, and exchange any goods and services online using a balanced means of exchange- cryptocurrency.
I
n addition to using cryptocurrency as means of exchange, there is no tax removal on profits made from cryptocurrencies. According to the laid down Panama constitution, foreign assets or income are exempted from capital tax gains. Over the years, the country has stuck to this right and would not change it even now that most citizens would adopt cryptocurrency.
Influence of Panama's New Crypto Law on the Economy
Although there have been negative speculations about the new bill, it is a prospective step for the country's economic growth. The new bill will serve and improve the economy in the following ways;
- Facilitate unlimited transactions on any platform regardless of location. This solves the limitation with a location that most countries often face.
- With the new bill, high-value transactions can be completed efficiently and faster without extra payments.
- There is a high chance of battling high volatility in the Panamanian economy. This makes it possible for every citizen to develop and maintain a source of personal income- self establishment.
Considering all these merits that cryptocurrencies serve for the country, no doubt, the legislation made the right choice.
CONCLUSION
The new Panama bill has given its citizens a great chance to earn a fortune via cryptocurrency without paying tax. Profits made off crypto coins can further be invested into the development of the economy, which is a win-win for everyone. Real currencies can be easily forged, which, when used during an exchange, limits the authenticity of the money. However, anyone cannot create or develop cryptocurrencies, and to an extent, this limits thefts and frauds. The adoption of cryptocurrencies is the safest means of exchange for transactions in this modern age.
Author: Gate.io Observer M. Olatunji
Disclaimer:
* This article represents only the views of the observers and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.
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