Even though the President has earlier praised the regulations as creative, his concerns about anti-money trafficking provisions have forced the package back into cabinet consideration.
President Laurentino Cortizo of Panama has unilaterally blocked Bill No. 697, sometimes known as the “crypto bill,” claiming that it needs additional work to conform to Panama’s financial accounting standards.
After Panama’s National Assembly approved the cryptocurrency bill in late April 2022, President Cortizo indicated in May that he would not sign anything unless it contained extra anti-money washing measures.
The President noted that it is “absolutely essential” that cryptocurrency laws adapt to new norms established by the Financial Action Task Force (FATF), establishing “accounting quality and avoidance of financial fraud,” according to a version of the 32-page veto acquired by local news media source La Prenda.
President Cortizo has regularly alluded to the bill as an “innovation law” and expressed support for certain sections of it, but has also stated that potential illegal applications of cryptocurrency must be addressed.
On June 16, Congressman Gabriel Silva, who introduced the law in September 2021, tweeted that the veto was “a wasted chance to produce jobs, encourage investment, and embrace technology and creativity in the public sector,” as per a translation.
“The nation needs more chances and access to financial services,” Silva remarked, adding that Congress will consider the veto and make changes before debating it.
If the measure is approved, Panama will become the second Central American country to control cryptocurrency expenditure. El Salvador, a neighbouring nation, is noteworthy for being the first to recognize Bitcoin (BTC) as legal cash.
Unlike El Salvador, Panama’s bill includes cryptocurrencies other than Bitcoin and does not force local firms to adopt them.
Panamanians “may openly decide on the usage of digital currencies, also without limitation Bitcoin and Ethereum (ETH),” as a replacement for traditional payment for “any civil or economic activity,” as per the measure.
The measure would also govern the tokenization of valuable metals and regulate the production of digital currency. The use of blockchain or public blockchain technologies to digitize identities would also be investigated.
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