- Panama is advancing a new crypto law to regulate digital assets and encourage adoption.
- The latest legislation defines Bitcoin, Ethereum, and stablecoins as valid payment options by mutual agreement.
- Lawmakers aim to address compliance standards, tax rules, and consumer protections with the bill.
- The bill includes incentives for blockchain startups, such as tax exemptions for five years.
- Established banks in Panama are showing increased interest in digital assets and crypto services.
On July 1, 2024, Panama marked a new phase in its cryptocurrency regulation as lawmakers introduced a comprehensive bill to regulate digital assets. The legislation seeks to define clear rules for the use of cryptocurrencies, boost investor confidence, and secure Panama’s status as a regional financial hub.
The bill recognizes Bitcoin, Ethereum, and stablecoins as valid forms of payment when agreed upon by both parties. It requires all Virtual Asset Service Providers to register and comply with “know your customer” (KYC) and anti-money laundering (AML) requirements. This framework aligns with the 40 recommendations from the Financial Action Task Force (FATF) and sets up a special tax regime for crypto activities.
Alternate Deputy Gabriel Solis stated that the effort to regulate crypto in Panama has focused on building trust and institutional capacity. “It’s not just an adoption bill—it’s a bill about trust and institutional maturity,” Solis explained. He said the proposed law would establish the National Council for Digital Assets to coordinate and oversee the new regulations. In an interview, Solis cited increased attention from banks such as Towerbank, Canal Bank, Credicorp Bank, and Caja de Ahorros as signs of the growing importance of digital assets in Panama’s financial sector.
Earlier efforts in 2021, such as Bill No. 697, were vetoed or struck down due to concerns about anti-money laundering and gaps in oversight. The new bill, known as Bill No. 247, incorporates lessons from past attempts and refines compliance and governance structures. Solis emphasized that the law allows optional use of cryptocurrencies rather than making them mandatory, distinguishing Panama’s approach from other countries. He also said, “Unlike mandatory legal tender models, ours ensures contractual freedom and legal certainty, allowing fintech companies to operate in a regulated yet flexible environment.”
The proposed law supports broader blockchain use, including digital identity, tax payments, and real estate registry. According to Solis, using blockchain for these purposes could reduce delays and documentation problems in government processes and create a secure and accessible system for citizens.
Panama’s crypto bill provides tax exemptions for up to five years for blockchain startups, along with benefits for long-term asset holders. For more on Gabriel Solis’s views and the law’s goals, visit the full interview at La Estrella.
Lawmakers hope this effort will position Panama as a “safe harbor” for digital innovation and attract investors and companies to the nation’s expanding fintech sector.
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