President of Panama shoots down bill on cryptocurrencies citing FATF guidelines

Panamanian President Laurentino Cortizo partially vetoed Bill No. 697, dubbed the “crypto bill,” saying it requires more work to better fit Panama’s financial regulations.

President Cortizo previously warned in May that he would not sign the bill unless it included additional anti-money laundering rules after Panama’s National Assembly approved the crypto bill in late April 2022.

Local media outlet La Prenda obtained a copy of the 32-page veto, reporting that the president wrote that it is “imperative” that cryptocurrency laws conform to new regulations recommended by the Financial Action Task Force (FATF) that outline “fiscal transparency and the prevention of money laundering”. .

President Cortizo previously described the legislation as a “groundbreaking law” and indicated approval of certain aspects of the bill, but said potential illicit uses of cryptocurrencies needed to be addressed.

Congressman Gabriel Silva, who helped introduce the bill in September 2021, tweeted on June 16 that (according to a translation) the veto was “a missed opportunity to create jobs, attract investment and incorporate technology and innovation in the sector.” public”.

“The country deserves more opportunities and financial inclusion,” added Silva, and said that Congress will study the veto to make the corrections that will later go to the debates.

Related: Top 30 Panama Bank is ‘Bitcoin Friendly’, Welcomes Crypto Services

If the bill is finally signed, Panama will become the second Central American country to regulate cryptocurrency spending. The neighboring country of El Salvador was famous for being the first country to make Bitcoin (BTC) a legal tender.

Unlike El Salvador, however, Panama’s bill covers cryptocurrencies other than Bitcoin and would not require local businesses to accept digital assets.

According to the bill, Panamanians “can freely agree to the use of crypto assets, including, among others, Bitcoin and Ethereum (ETH)” as an alternative payment for “any civil or commercial operation.”

The bill would also cover the issuance of digital value and regulate the tokenization of things like precious metals. The government’s innovation authority would also investigate a digitization of identity using blockchain or distributed ledger technology.

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