Panama is making significant strides in the regulation of cryptocurrencies and the promotion of blockchain-based services with the unveiling of a comprehensive draft bill. This move signals Panama’s commitment to positioning itself as a leading fintech hub in Latin America.
The proposed legislation aims to provide a legal framework for the use of digital assets in financial transactions, establish licensing requirements for service providers, and ensure strict compliance with international financial standards. One of the key aspects of the bill is the legal recognition of digital assets as a means of payment, allowing individuals and businesses to use cryptocurrencies like Bitcoin, Ethereum, and stablecoins in commercial and civil contracts.
The draft bill also introduces regulations for Virtual Asset Service Providers (VASPs), such as wallets, exchanges, and custody platforms. These entities would be required to register with the Financial Analysis Unit (UAF) and comply with Know-Your-Customer (KYC) and anti-money laundering (AML) guidelines in line with FATF recommendations. Non-compliant entities could face administrative sanctions or criminal penalties.
In addition to financial regulation, the bill encourages the use of blockchain technology in public administration. It includes provisions for digital identity systems, tokenized securities issuance, and the legal recognition of smart contracts. These measures aim to streamline bureaucratic processes, increase transparency, and foster innovation in the public and private sectors.
The draft bill represents a significant policy shift following a previous crypto law that was partially vetoed by the former President due to regulatory gaps and constitutional inconsistencies. The new draft addresses these concerns by clearly defining the roles of regulatory authorities, such as the UAF and the Superintendency of Banks of Panama.
The bill is set to undergo committee discussions in the National Assembly in the coming weeks, where it may be amended before being brought to a vote. If passed, this legislation could pave the way for Panama to establish itself as a pioneer in the regulation of cryptocurrencies and the adoption of blockchain technology in Latin America.