“Panama, unlike El Salvador, does not depend on remittances for their GDP, so that lowers the motivation to pass a bill quickly.”
Author’s Note: 0.9% of Panama’s (gross domestic product) GDP is from remittances , whereas remittances make up 24.1% of El Salvador’s GDP.
What has Gabriel Silva indicated about his current position on a bill?
AP: “We have been giving him input, but we don’t know what he is going to propose. However, he did say it will be proposed in August. He will probably propose a general cryptocurrency law instead of a bitcoin-only law. I’m not that worried about it because in the end bitcoin will win.”
Why do you think it should be a bitcoin-only bill?
A.P. “Panama has a big informal sector, meaning a lot of people don’t have bank accounts and taxes. There are way more cell phones than bank accounts in Panama.”
Author’s Note: As of 2015 it was estimated that 70% of Panama’s population is unbanked.
“It makes a lot of sense for Panama to adopt bitcoin because (1) It doesn’t have its own currency, (2) The U.S. has used the dollar as a political weapon by cutting off supply to blacklisted countries, and (3) The debasement of the dollar hurts dollarized countries, especially because they don’t get any stimulus money from the U.S. government.”
“And now, the Lightning Network allows for easy on and off ramps, so bitcoin is in a great position to become a major part of Panama’s financial system. If not this year it’s likely that 2024 has a better chance because it’ll be a new government.”
Why might a Bitcoin bill fail?
A.P. “Panamanians don’t like anything the government imposes on them so they’d rather see a bottom-up approach that’s driven by the people. Panama might be a case where you have to build consensus from the bottom up instead of the top down like El Salvador.”
El Salvador had the benefit of Bitcoin Beach in El Zonte as an example of how bitcoin works in real life. Are there any examples of places in Panama doing anything similar?
A.P. “There are a few people in Panama taking bitcoin as payment for services now, but it’s not widespread or as well supported as El Zonte.”
What do you think will be the next country to join El Salvador in adopting bitcoin as legal tender?
A.P. “First of all, I’m very distrustful of politicians and many are using laser eyes because they want to gain popularity.”
“Secondly, Latin American countries want dollars because they see the debasement of their currencies and look to the dollar for stability. They see the problem with their own currencies but don’t have a dollar bank account. Their expenses are very small because they earn so little. Everything they earn is physical and in dollars. So they waste a lot of time with that system. Bitcoin’s Layer 1 itself is unlikely to be adopted by the people. The Lightning Network is what’s going to make it really go, it changes everything. So once people understand the benefits of adopting bitcoin through the Lightning Network, they will demand it.”
“Paraguay is interesting because they run a hydroelectric energy program with Brazil called the Itaipu Dam which generates a lot of excess energy that they want to use for mining. However, there’s a rule that miners have to register with the government or risk going to jail.”
“The next will probably be a smaller country like Honduras, Guatemala, or another country with a lot of remittances.”
“I don’t expect any countries this year. It’s going to likely hinge on which countries adopt the Lightning Network the fastest.”
You can find Abelito on Twitter @AbelitoPanama .
Interview With Joseph Isaza
What inspired you to write the proposed bill?
J.I. “We have to understand that the world is changing. No one thought 10 years ago that cryptocurrencies would be big today. Now that El Salvador is accepting bitcoin as currency, there are new possibilities for Panama to become a leader in this movement. If Panama were to accept bitcoin as a currency, it would create a free economy and make it a hub for cryptocurrencies.”
Who did you send the bill to?
J.I. “The Panamanian assembly has a program where if you have an idea you can write a bill and send it to the office in Panama City. That proposal has to pass through many legal processes to survive. My bill has already passed through the legal office of the Panamanian assembly. Now it’s in the first debate where it has to be discussed/reviewed by seven deputy senators who can approve, add, or reject any part of the bill.”
“If it passes the first debate, it will go to the second debate which is in the Parliament. At that point all 72 deputy senators would discuss the project. If it passes that, it goes to a third debate with all the deputies plus others such as non-government organizations, university professors, and others. If it passes the third debate, it goes to the president, who discusses it with the minister of economics, before signing it into law.”
Are there any other bitcoin bills being considered?
J.I. “In 2019 a similar bill was proposed but didn’t pass. The difference is my bill aims to make bitcoin a currency whereas the other law just tried to regulate it as a digital asset.”
“Deputy Gabriel Silva announced that he was planning to propose a bill in March, however it hasn’t been released. I proposed my bill in mid-May.”
“I also submitted another bill for cryptocurrency mining and it is being reviewed by the economics commission.”
When will we know if your bill will move on to the second debate?
J.I. “The cryptocurrency bill could be approved for the second debate in one week or up to three months. It has been two months since submitting the proposed bill. They added an article that the government will make a commission for the analysis of the project.”
How long will it take for a cryptocurrency bill to pass in Panama?
J.I. “A lot of it depends on how the price of bitcoin behaves in the next few weeks and months. It if goes up, the perception of the deputies and president will be positive and they will be more favorable toward bitcoin. Another factor is how successful El Salvador’s rollout of their new law goes. That will heavily influence the urgency with which Panama, and other countries pursue their own bill.”
What do you hope will be the result of a cryptocurrency bill passing in Panama?
J.I. “I hope and expect that the employment rate will increase because with this bill I propose that Panama could bring new foreign investors to the country. It’s the country in Central America with the fastest internet. So it will increase the economic friendliness for foreigners and citizens.”
Who do you think will be the next country to join El Salvador in adopting Bitcoin as legal tender?
J.I. “Maybe Columbia or Costa Rica. Colombia has U.S. companies investing in them like Amazon. Costa Rica has Walmart invested in it. Cryptocurrencies seem to be well accepted by their people. If the companies like Amazon and Walmart start accepting bitcoin, it may move those countries to adopt bitcoin bills faster. Maybe Ecuador because they have the dollar as their currency.”
You can find Joseph on Twitter @IsazaJoe .
Though the wait for a second country to pass a bitcoin bill can be painful, it will happen and that country could be Panama. As Abelito and Joseph make clear, bright minds abound there and will put positive pressure on their government to make bitcoin a major part of making their future bright.
This is a guest post by Josh Doña. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.
