Panama: National Assembly Passes Bill Regulating Cryptocurrency

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On April 28, 2022, Panama’s National Assembly announced that it had passed Bill No. 697, which regulates the commercialization and use of cryptoassets. The bill provides that individuals located in Panama and companies established in the country may freely use such assets as payment for any commercial transaction allowed under Panamanian law.

The bill indicates that the specific cryptocurrencies that can be used include (but are not limited to) Bitcoin, Ethereum, XRP, Litecoin, XDC Network, Elrond, Stellar, IOTA, and Algorand. Cryptoassets are defined by the bill as a fungible or nonfungible digital annotation on a distributed ledger (which may or may not be based on blockchain technology) whose possession can be proven using cryptography and whose transfer can be done by means of digital signatures that make use of cryptography.

Furthermore, the bill provides that Panama’s Government Innovation Authority is to consider using blockchain technologies in public registries if doing so can promote transparency. In addition, the government of Panama will have the authority to offer digital wallets to individuals and companies for purposes of making payments and exchanging cryptoassets in a secure manner, incorporating and facilitating the latest blockchain technologies. Panamanian agencies will receive payments applicable to taxes using cryptocurrencies in accordance with relevant directives to be issued by Panama’s tax authority later in 2022.

Companies that wish to provide services involving cryptoassets will need to obtain a license from the nation’s Department of Commerce and will be subject to Panama’s laws and regulations addressing anti-money laundering activities, combating the financing of terrorism, and financing the proliferation of weapons of mass destruction.

Under Panama’s Constitution, the approved bill must be signed by the president of Panama for it to become law. If the president approves the bill, pertinent regulations will be issued later in 2022.

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Reading time: 12 minute(s)