The cryptocurrency fever has reached the Great Central American Metropolis, Panama City. This Wednesday, the Municipal Council of the District of Panama unanimously approved an agreement that authorizes the Mayor's Office to sign an agreement with the TowerBank Bank to enable the payment of municipal taxes through cryptoactive. Mayor Mayer Mizrachi concluded that, for the first time in a Panamanian institution “Citizens will be able to pay their obligations and contributions in crypto”. «This is Hage (huge) because the Mecca of Finance of Central America was staying behind,» said the media mayor through a video broadcast on social networks, in which he addressed the citizens sitting in their Cybertruck Tesla while traveling through the city. The agreement that Mizrachi will sign with TowerBank will allow this company to work as an intermediary that will receive taxes in tax cryptoactive and make them dollars that will later transfer to the local government. That is, the municipality will not directly receive or manage cryptocurrencies. «Legally and constitutionally it is supersimple,» added the mayor. According to the Municipal Council, this measure positions Panama's city as a «financial innovation pioneer» and means a «advance towards a more efficient, inclusive public management adapted to digital times.» In an official statement, from the Board they clarified that the use of cryptocurrencies will be “voluntary” and that it will not replace other payment methods. They also pointed out that the measure will not result in any additional cost for the local government and that it will not alter the tax regime. The authorities of Panama City stated that the payment of taxes with cryptocurrencies is a measure of «transparency.» This is a thorny issue for the Canalero country, which for years has charged with an image of fiscal paradise that has not been able to shake. Although in 2023, the Central American nation was excluded from the gray list of the International Financial Action Group, until today it remains in the list of countries considered tax havens by the European Union. Tower Bank, in addition, has its central offices in the Caimán Islands, another historic fiscal paradise. Mizrachi's Mayer in Panama City, on January 30.FOTO: Enea Lebrum
Potential advantages
Cristóbal Pereira, director for Latin America of the Digital Chamber of Commerce and Blockchain, argues that blockchain technology with which cryptoactive works provides “security” to transactions. This is because it can be made “complete traceability in payments”, which guarantees “more efficiency, speed and transparency”. «I think this will allow more and more municipalities to add to this trend. It would be very good to generate interconnection between the same municipalities,» he added. For Javier Adelfang, Argentine economist and analyst, «the objective seems to be expanding the range of means of payment for taxpayers and facilitating the collection objectives.» According to him, for the municipality «there would be no risk», since, since there was an intermediary bank, it will remain «away from the characteristic volatility of the crypto.» Economist
«Normalization» of the crypto
Adelfang considers the measure of the city of Panama as «an advance in the normalization of cryptocurrency use.» These currencies, according to the Argentine, «have not stopped growing» in the last decade and recently acquired a new impulse with the return of Donald Trump to the White House, since the president ordered this year to create a “strategic reserve” of Bitcoin (a good part of Trump's fortune comes from the cryptocurrency cryptocurrencies. In 2021, President Nayib Bukele turned Bitcoin into an official currency, something unpublished in any country in the world, but at the beginning of this year he reversed due to the pressure of the International Monetary Fund. The economist pointed out that the results that the Panamanian experience, over time, will determine “if it becomes an incentive so that the rest of the countries in the region follow their way”. He stressed, however, that the volatility of cryptocurrencies causes the caution of many politicians and that not all countries have the same conditions of Panama, that it has «a level of financial opening that its neighbors do not have.»