What’s the first thing that comes to mind when you hear the word “Panama?” The Panama Canal? Please don’t say Van Halen’s catchy ode to nothing resembling actual Panama.
Having gone there for the first time this September, my eyes were opened to the beauty of the people and their land in this historically key country. While its canal has been contributing greatly to the world’s physical economy since opening in 1914, Gabriel Silva and Felipe Echandi are helping Panama add to the digital economy wave that has been swelling steadily since Bitcoin’s birth. Read on to hear directly from them on this vital bill for Panama and the world.
Silva is an independent deputy in the Panamanian Parliament, where he has served the 8-7 circuit since 2019. In 2016, as a Chevening scholar, he graduated with a master’s degree in public policy at the University of Oxford. In 2017, as part of the Fulbright Program, he completed a master of laws degree at Columbia University. He has presented legislative proposals related to anti-corruption, government transparency, educational reforms, and mental health among others.
Echandi is the cofounder and CEO of Cuanto, a Y-Combinator-backed startup that helps creators monetize their audiences. Echandi is also an independent board member at Panama’s banking regulator. He holds an MBA from The University of Texas at Austin’s Red McCombs School of Business.
How do you plan to educate the people of Panama about the benefits and accessibility of crypto assets like bitcoin as written in your bill?
Silva: My team and I are trying to make the information as easily accessible as possible. When we made the proposal we did several things to educate the general population about it, including posting videos and infographics to explain the bill in English and Spanish on all social media platforms like Twitter, Instagram, Facebook and TikTok.
Thankfully, the cryptocurrency community is very loud and energetic on social media so they have helped us share the message that we’re trying to portray. For example, the one-minute video I posted on Twitter about the bill was the most viewed video I’ve ever posted.
We still have much to do, so we are working with influencers outside of the crypto community to help us educate people on the bill. We are also making a strong campaign on the traditional media platforms such as newspapers, radio and television stations to inform Panamanians about the proposal. The last time I watched TV for the news may have been 10 years ago, but there are many people who use that medium to get informed.
Thankfully, the traditional media here in Panama have been interested in our project so we have been getting a lot of exposure there. This bill follows other bills we have proposed in Parliament to improve financial education in high school and universities. One of the topics we have included in those proposals is teaching about the digital economy, which is part of our macro strategy that we are working on with the ministry of education and the ministry of finance. This approach is to empower our young people with financial education starting from a young age.
Echandi: One more thing I’d like to add, we’ve had coverage in two of our largest newspapers and it was surprisingly positive.
The editorial in the largest paper covered us and basically said we need to open up to this world of cryptocurrencies as a nation. In addition to the efforts that Gabriel mentioned, I believe the good thing about setting the groundwork for an ecosystem to arise is that the people who provide utility for consumers are the best educators in the end.
A good product maker or someone who creates the solution to a real problem is a better educator than any public campaign. If we manage to unlock the roadblocks in the financial system for people to innovate and create products to include people financially, this will lead to more educated consumers and users. This will empower people to move money internationally, make a living on the internet, and participate in this cutting edge of value creation with crypto assets, which will lead to a better ecosystem, because the people in it will be solving problems for their own lives.
So, I believe education will come with more access to better products. The problem has been that there are so many roadblocks for the average Panamanian to access this ecosystem. You first need to have a bank account which already excludes half of the population, you then have to do international wires which is an additional complexity that is not cheap, and then you have to deal with a ton of intermediaries so the banks won’t block you and so everything works.
In contrast, an American citizen for example simply connects their bank account to Coinbase or a similar solution and they have an initial contact with this world and eventually, of course, they become more savvy. I believe a good ecosystem and an openness to create certainty for innovators to create and solve problems for others will in itself bring forth a ton of education.
The last point I want to make on this is in the article regarding the radical digitalization of the government that guarantees universal access to the internet. This may be seen as a by-point in the law, however it is the infrastructure for everything to actually work. Panama already has decent connectivity, especially in urban areas, however we don’t really have a deliberate policy of universal access to the internet. There are many countries that have already experimented with this so we don’t believe it is something that has to be super expensive to be guaranteed. If that happens, we don’t believe we’ll have to underestimate people’s ability to browse online and consume information from good sources.
So, I’m super hopeful that with a good ecosystem in place and decent access to the internet, people will get access to education aside from the efforts we’re making in the public sector.
How does Panama compare to other Latin American countries in the innovation and cryptocurrency landscape?
Echandi: I would say Panama is about average or maybe even under average compared to other Latin American countries in the digital economy boom.
Countries like Mexico, Brazil and Colombia have exploded with many non-crypto-related solutions such as on-demand delivery apps, ride sharing apps, even the more traditional fintech solutions. We have a relative regional lag because we don’t have certainty for many of these business models, even if they’re not related to crypto.
We don’t have banking interoperability like Mexico, Costa Rica or Colombia, and this is something we have attempted to solve in this bill. We don’t have clarity on the licensing for certain activities that in other countries have clear requirements and licensing. Examples are crowdfunding, wallet creation (crypto or otherwise), PayPal, etc. We have a traditionally competitive financial system, however it became inflexible because it didn’t adapt itself to these varied business models that the internet has enabled, even before crypto started emerging. So, we have on-demand delivery apps that the general public uses, we have e-commerce solutions that exploded with the pandemic, however the digital ecosystem is still not there and that’s part of the problem even beyond crypto.
We are reinventing the competitiveness of a country that has already been open to the world. The thing is that the meaning of “openness to the world” has changed with the internet. So, how does a country that was open to the world in “meatspace” become open to the world in “digital space?”
That is this bill, that is what we want to do. We think countries that do not pose this question to themselves will not be sustainable and we want to remain a relevant and sustainable location as physical location starts losing relative importance as part of the total value creation picture.
If you see our coat of arms, it says pro mundo beneficio which means for the benefit of the world, we’re translating that into digital for the benefit of the future. How can we fulfill that promise we have here with the internet? That’s the whole point. Crypto assets are just the latest incarnation of that. It’s also the metaverse, virtual reality, virtual art, and virtual communities. How is that going to be a part of our DNA as a nation and how do we take the steps in that direction? That’s the foundation this bill is trying to build.
Silva: In addition to what Felipe said, I think this project is very important because when you consider the statistics in Panama and how many people have real access to the banks, loans, and credit cards, it’s less than half of the population. Today, without a debit card, credit card, or bank savings account, it’s very difficult to progress, get a job, buy things, and get educated.
So, when you consider that half of the population is not getting that chance to participate in the modern economy, that’s very sad and horrible for our progress as a country. This project seeks to improve the digital economy including the use of cryptocurrencies which has the potential to pick up the people who don’t have bank accounts or access to financial services and help them participate in the 21st century economy, get involved, and progress. That’s the human side of this initiative. This isn’t just about making lots of money, but getting people involved.
What are the key differences between El Salvador’s approach to its law and your approach for Panama?
Echandi: We believe that they’re totally different efforts and they’re trying to solve completely different problems. El Salvador, we think, is a massive push toward Bitcoin adoption specifically, because it mandated adoption of bitcoin as legal tender. In Panama, that would be unconstitutional. We can’t force anyone to take a specific currency because we have monetary freedom…
Read More:Interview: Discussing Panama’s Crypto Bill With Its Architects
2021-11-09 00:00:00
