Panama’s Crypto Law: A Gateway to Bitcoin and Crypto Adoption
A few months back, Panama created quite a buzz with a major announcement regarding a crucial law project. The mayor of Panama District, Mayer Mizrachi, even made an appearance at the Bitcoin Conference in Las Vegas, adding to the excitement surrounding the Panama crypto law. Now, let’s delve deeper into this project, as it has the potential to unlock a significant hub for bitcoin and crypto adoption, complete with established connections to well-known banks.
“Panama’s experience with Bill No. 697 was pivotal. It taught us that regulating crypto goes beyond good intentions; it requires alignment with international standards, tax clarity, consumer protection, and institutional coordination,” shared Gabriel Solis, Alternate Deputy and a key advocate of the crypto law, during an exclusive interview.
Panama Crypto Law And Its Context
Solis referred to a previous law project, Bill No. 697, Panama’s initial attempt at regulating cryptocurrencies. Introduced in 2021 and approved by the National Assembly in April 2022, the bill faced challenges. President Laurentino Cortizo partially vetoed it in June 2022 due to concerns over anti-money laundering compliance, regulatory oversight gaps, and constitutional conflicts. Subsequently, the Supreme Court declared the bill inapplicable in 2023.
Learning from this experience, Solis spearheaded a renewed legislative effort with Bill No. 247 in 2025. This updated bill establishes a clear legal framework recognizing Bitcoin, Ethereum, and stablecoins as valid payment methods, mandates licensing of Virtual Asset Service Providers registered with the Financial Analysis Unit, and ensures compliance with KYC and AML standards in line with FATF recommendations.
The draft also outlines the broader applications of blockchain technology in public administration, including digital identities, tokenized securities, and legally enforceable smart contracts. Central to the bill is the creation of the National Council of Digital Assets to oversee coordination and governance.
Encouraging Local Engagement
One notable shift since 2021 is the increased local interest and engagement with the crypto ecosystem from the banking sector. Leading banks like Towerbank, Canal Bank, Credicorp Bank, and Caja de Ahorros have taken steps to embrace the digital economy. Solis emphasized the importance of providing legal certainty to the industry, protecting users, and positioning Panama as a regional leader in crypto regulation.
Differentiating from El Salvador’s approach, Panama’s law emphasizes voluntary acceptance of BTC and cryptocurrencies, promoting contractual freedom and legal certainty. This approach aims to create a regulated yet flexible environment for fintech companies to thrive, positioning Panama as a safe haven for digital innovation.
Unlocking Panama’s Potential
The Panama crypto law envisions transformative changes for the country, aiming to capitalize on the potential unlocked by the crypto industry. Incentives such as tax exemptions for blockchain startups for up to five years and preferential capital gains treatment for assets held over three years are designed to attract investment and foster growth.
Blockchain implementations are also a key focus, with Solis highlighting the potential for applications in property registry, public deeds, digital identity, and tax payments. These advancements signify a new era of trust and efficiency, positioning Panama as a forward-thinking and innovative player in the crypto space.
In conclusion, the Panama crypto law represents a significant step towards fostering bitcoin and crypto adoption in the country. With a modern regulatory framework, strategic incentives, and a focus on blockchain technology, Panama is poised to emerge as a leading destination for investors and companies looking to leverage the benefits of digital assets.