Panama has followed El Salvador's lead and taken steps towards officially accepting cryptocurrencies as legal tender.
Congressman Gabriel Silva introduced a bill to regulate its use – and announced it on social media on Tuesday. In a Twitter post, he said the government is seeking 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," he added.
New ways to pay
According to the draft bill, the new legislation would allow legal and natural persons based in Panama to "freely agree on the use of crypto assets, including without limitation bitcoin and ethereum, as a means of payment for any civil or commercial operation not prohibited by the legal system of the Republic of Panama."
Moreover, the document includes proposals to migrate public records to blockchains, digitise legislative and administrative acts using blockchains, and make it possible "to refer to smart contracts or decentralised autonomous organisations in constitutive documents of legal entities organised in the Republic of Panama."
Global digital economy
The document also noted that "like any technology, crypto assets have risks" – and has compared the situation to the early days of the internet.
"As cryptoassets are means of payment native to the internet, not making Panama compatible with their use would imply that the internet will not grow in that direction; it means excluding our population from the global digital economy while renouncing our long-standing tradition of serving the entire world," the shared document stated.
"Today, over 100 million people own cryptocurrency or crypto assets. This represents over 25 times the Republic of Panama’s population."
The introduction of a new method of payment in Panama would mark a significant shift, as residents have only used the US dollar as a means of payment since the country entered the Taft-Arias monetary agreement with the US in 1904.
El Salvador crypto
Meanwhile, on its first day recognising bitcoin as a legal currency, El Salvador experienced such high demand that the government was forced to take the digital wallet offline.
The move was welcomed by the country's government and the bitcoin community. However, it has been criticised by most Salvadorans, and in global financial circles, over fears it could bring chaos and confusion to the nation’s economy.