In this interview, we can hear Peter Besina sharing his experience of operating a Bitcoin ATM business in Central America. A born Slovak and a crypto-anarchist coincidentally ended up in Panama, enjoyed the financial freedom, and decided to stay. Long story short, he is now a CEO and a Co-Founder of Paralla Tech, a Bitcoin ATM operator with 10 locations across Panama.
Regulation and KYC
When it comes to law, Peter says that crypto-related regulation still didn’t pass through. Actually, two years ago it passed through parliament over there but then it wasn’t signed by the president because it was unconstitutional. The problem was that the regulation was not prepared good enough considering the fact that Panama doesn’t have a legal tender. Either way, he is optimistic and thinks that things must change in the future.
Until things do change, it will be a problem to find a bank willing to work with crypto companies Peter complains. Panama Papers really shook the entire banking system, and they aren’t willing to work with a client if they can’t perform a risk assessment of them. On the other hand, they can’t perform it on Bitcoin ATM companies because they aren’t trained well enough. Peter then explained how Paralla Tech is trying to work directly with the banks teaching them how to do risk assessment and showing them the real potential of the Bitcoin ATM business.
Regardless of the lack of regulation, the machines still need to do a KYC and all the checking against the sanction list. There is a small limit under which customers can go without any identification.
The Crypto Adoption
Having in mind that Panama is located within the proximity to Costa Rica where there’s a Bitcoin jungle, and El Salvador which is the first country that has made Bitcoin a legal tender, it is safe to assume that the crypto adoption in Panama is growing. Peter agreed, adding that the adoption is also dependent on the actual government, with expectations that things will be even better after the upcoming election.
As per Peter, the current crypto community in Panama is in the lower thousands mainly located in Panama City or close to the Costa Rica border. He also says that the most common use case for Bitcoin ATMs in Panama is remittance. There are a lot of people coming from Venezuela and Colombia to work there illegally and they massively use crypto to send the money back home.
The Machines
Peter talked a bit about the Paralla Tech machines saying that in the past they supported a lot of coins but despite that 90% of all transactions were done in Bitcoin. That’s when they decided not to support a large number of coins because of the infrastructural, technical, and security challenges. Their machines currently support Bitcoin, Ether, and USDT, while they recently added Tether gold which they think will perform very well with the way the macroeconomic climate is right now.
As for keeping the machines full, Peter explained how they don’t need the Fiat Gateway and because of that, it’s much easier for them to buy and sell USD or USDT. Currently, they are onboarding to Bitfinex.
Pros and Cons of Doing Business in Panama
Apart from the regulatory and banking obstacles we already mentioned, the first and obvious obstacle for Peter was being a guy in a foreign country. To make it in such a scenario you need to have either a lot of money or business contacts, which he did not. So, it took him some time to get over that hump. In addition to that, he didn’t expect to be so physically involved in his business there but rather be able to travel more. Furthermore, there’s a challenge of doing business in a country that’s not using US dollars that much. For example, $500 is around 2 million Colombian pesos, which means that after about $2000 worth of transactions you would need to replenish the machine. That type of cost can really affect your business.
On the other hand, Panama acts like a Hub for Central America where a lot of people is transitioning through, and there is a lot of tourism which creates a diversified customer base. Another thing Panama provides is safety. Bear in mind that it is not as good as in Europe, but it is much better than other Central or South American countries.
Summary
Having heard what Peter had to say, we can conclude that Panama is a financially free and fairly safe country to operate a Bitcoin ATM business. There is no regulation but banking is a bit tricky to obtain. The crypto community there is growing due to its geopolitical location.