Cryptocurrencies are a digital form of money, also called virtual currencies or cryptocurrencies, which use digital encryption and have the main function of constituting a means of payment.

It is a digital asset that works using a peer-to-peer or person-to-person network, called P2P (just as other programs worked at the beginning of the year 2000, as means for exchanging files). They were created in 2009 by "Satoshi Nakamoto". and, to date, the identity of this person is unknown. It is unknown if he/she is an individual or group of people, since he/she is only known by its pseudonym. The idea of creating the cryptocurrency called Bitcoin arose after the great international economic crisis that affected hundreds of countries and millions of people. The intention was to create a new way to carry out international transactions quickly and safely without so many requirements and / or protocols, since there is no financial entity that regulates it. Its issuance is decentralized because it is notlinked to any particular State or issuing bank. The design of Bitcoin allows the transfer of values between accounts anonymously and without intermediaries, since transfers are made directly from person to person, thus reducing costs, since no intermediary is used and no commission must be paid.

In addition, its system is so sophisticated that it is almost impossible for it to be forged, which makes it a more secure mechanism than a transfer between bank accounts.

It is important to mention that cryptocurrency transactions are irreversible and their main feature is their anonymity since it isnt necessary to reveal any identity when carrying out transactions, thus preserving the privacy of the parties.

Today, cryptocurrencies are used in different acts of international trade. Although their use is not regulated worldwide, in our country there is a draft law, presented on October 22, 2020, that seeks to regulate the use of virtual currencies or cryptocurrencies and the forms of transaction with them in the territory of the Republic of Panama.

Said draft law, in its article 3, numeral 1, defines cryptocurrencies or virtual currencies as "an asset of a virtual nature, which is represented in a value thats registered electronically and that can be used by people as a form payment for any type of legal act and whose transfer can only be carried out through electronic means ".

If approved, this law has, amongst its objectives, to increase tax collection since it is intended to tax any transaction carried out with virtual currencies and thereby contribute a portion of the proceeds to the Disability, Old Age and Death Fund (nown in Spanish as IVM) of the Social Security Fund. It also contemplates the creation of the Cryptocurrency Fluctuation Reserve Fund, which will be attached to the General Directorate of Income, that will administer a percentage of the tax paid as on cryptocurrency operations.

It is extremely important that the uses of commerce go hand in hand with technology. Countries that do not adjust to this new reality and update their laws will loose competitiveness within the international trade and their economies will surely be affected.

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The government of Panama in search of cryptocurrencies regulation - Lexology