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Two more nations have moved towards broader acceptance of cryptocurrency in the same week that El Salvador formally accepted Bitcoin as a type of legal tender. The day after El Salvador’s Bitcoin Law went into force (on September 7), Ukraine enacted a draft law to legalize cryptocurrencies, with the goal of opening up the crypto market to companies and investors by next year.
On the same day, Panamanian Congressman Gabriel Silva introduced the ‘Crypto Law: Making Panama Compatible with the Digital Economy, Blockchain, Crypto Assets, and the Internet.’ The purpose of this bill is to provide “legal, regulatory, and fiscal certainty to the use, possession, and issuance of digital value and crypto assets in the Republic of Panama.”
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It seems central American legislators are optimistic about the mainstream acceptance of cryptocurrencies, with Panama becoming the region’s second country to introduce legislation seeking legal status for Bitcoin and Ethereum. However, Panama’s proposed legislation differs significantly from El Salvador’s, which requires the use of Bitcoin.
While El Salvadorian companies must accept Bitcoin payments, they may use government infrastructure to convert Bitcoin to cash immediately. As a result, Panama will provide its residents with an option.
However, the most notable aspect of Panama’s draft crypto bill is that the government would enable its nationals to pay taxes in cryptocurrencies such as Bitcoin and Ethereum. This is the most crucial affirmation that the government is prepared to accept digital currencies.
On the other hand, Ukraine legalized cryptocurrency on September 8, when its parliament enacted a bill regulating virtual assets as well. As a result, it became the fifth country in the world to enact legislation to legalize and regulate cryptocurrencies. President Volodymyr Zelensky signed the bill to safeguard owners of virtual assets and exchange platforms against fraud.
“The development of a new industry will allow us to attract transparent investments and strengthen our country’s image as a high-tech state,” said Mykhailo Fedorov, Ukraine’s vice prime minister for digital transformation.
Furthermore, upon passing this law, Ukraine intends to open the cryptocurrency market to investors and commercial activities in the future. According to experts, the approved bill is critical since it recognizes virtual assets as intangible in the form of electronic data. It also mentions “wallet for virtual currency” and “private key,” two phrases that are new to Ukrainian law.
Crypto adoption intensifies all across the globe
Governments across the globe are gradually recognizing the significance, future possibilities, and the scale of demand for cryptocurrencies. Many nations have passed Cryptocurrency laws in recent months, with Latin America being particularly fruitful territory. Other governments will certainly wait to see how El Salvador’s crypto venture plays out before making a similar move, but they might not want to wait long if they want to reap the benefits of being early adopters.
In August, Cuba approved legislation recognizing and regulating cryptocurrencies for “socioeconomic reasons.” Countries such as Paraguay and Panama may follow El Salvador’s lead, at least in part. For several months, Paraguay has been working on legislation to establish a simple crypto licensing environment. Venezuela even launched its own cryptocurrency, the Petro, in 2018, although it was met with limited success.
On the private side, firms such as Visa are bringing cryptocurrency services to regular banking systems, allowing investors to invest in cryptocurrencies and ETFs without the use of middlemen or cryptocurrency payment cards.
Some EU member states currently regulate crypto assets independently, with Germany leading the way in crypto adoption with the approval of a law in July – enabling Spezialfonds, or special funds, to invest up to 20% of their portfolios in crypto.
However, in many other countries where cryptocurrency is legal (although not legal tender), governments are attempting to tighten the lid on taxation and fraud in ways that worry proponents of virtual currency. Many cryptocurrency traders watched in dread as the United States adopted a $1 trillion infrastructure package that included a clause forcing “brokers” of digital asset transactions to notify their customers to the Internal Revenue Service so they could be taxed.
The European Union has also begun to implement stricter financial laws for bitcoin transfers, with a new legislative proposal incorporating measures that would provide authorities access to sender and recipient data in order to assist them in combating dirty money.
In India, sentiment is bullish, and recent reports indicate that our administration is currently formulating a bill to define cryptocurrencies and categorize them as commodities or investments, depending on their intended use. The bill might also include taxation rules, such as regulations governing payments, investments, and other utilities.
These events take place at a time when cryptocurrency commerce is booming in India and throughout the globe. Domestic cryptocurrency exchanges have reported a significant increase in trading volumes, while the global cryptocurrency market capitalization has reached new highs. One thing is certain: cryptocurrencies are no longer an option but rather a necessity that has the ability to fuel the next economic powerhouse.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.