Panama is taking a serious step toward establishing itself as an innovation hub for cryptocurrencies and blockchain technologies in Latin America. The newly introduced bill aims to create a clear legal framework for digital assets by legalizing their use and encouraging the adoption of blockchain in both the public and private sectors.
The Bill Legalizes the Use of Cryptocurrencies in the Country
The proposed law grants official recognition to cryptocurrencies as valid means of payment in transactions between consenting parties.
This includes not only Bitcoin and Ethereum, but also stablecoins, which may be used for:
- Purchasing goods and services
- Repaying debts
- Executing contracts in business relationships
Strict Requirements for Virtual Asset Service Providers (VASPs)
The bill introduces regulations for virtual asset service providers (VASPs), such as exchanges, wallets, and custodial services. They will be required to:
- Register with Panama’s Financial Analysis Unit (UAF)
- Comply with Know Your Customer (KYC) rules
- Implement Anti-Money Laundering (AML) measures
- Be subject to sanctions or legal liability in case of violations
Blockchain in Governance: Digital Identity and Tokenized Securities
The new bill goes beyond just crypto payments.
It proposes:
- Integration of blockchain into government administration
- Development of digital identities
- Issuance of tokenized securities to promote transparency and automation
- Recognition of smart contracts as legally valid
From Veto to Revival: What Has Changed?
In 2022, a previous crypto bill was partially blocked by a veto due to regulatory ambiguities and constitutional concerns. The new proposal addresses those criticisms by:
- Clearly defining the roles of the UAF and the banking supervisory authority
- More precisely outlining the obligations of VASPs
- Adapting to international standards
Conclusion:
If passed, the bill would place Panama on the map as a crypto and blockchain hub in the region. It not only opens the door for the legal use of digital currencies but also lays the foundation for innovation in the public sector and the fintech industry.
The bill is currently undergoing further review in the National Assembly, where improvement proposals are expected before the final vote.
This article is for general informational purposes only and is not intended to be, and should not be construed as, legal or investment advice.
