Panama has revealed a sweeping bill Focused on regulating cryptocurrencies and promoting the development of blockchain-based services, indicating a renewed effort to position the country as a fintech leader in Latin America.
The proposed law establishes a legal framework for the use of digital assets for financial transactions, determines license requirements for service providers and includes strict compliance measures in accordance with international financial standards.
Legal recognition of digital assets
According to the bill, digital assets are recognized as a legal payment resources, so that private individuals and companies can freely agree with their use in both commercial and civil contracts.
The legislation explicitly authorizes the use of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and Stablecoins to buy goods, pay for services and to arrange debts, provided that both parties give permission.
The design also creates a regulatory framework for virtual asseters (VASPs), including portfolios, fairs and guardianship platforms. Each should be registered in a national database managed by the Financial Analysis Unit (UAF) and to obtain the correct authorization before they offer services in Panama.
The bill determines the mandatory compliance with the guidelines of the knowledge of the knowledge of your customer (KYC) and anti-money laundering practices (AML) in accordance with the recommendations of the Financial Action Task Force (FATF).
In addition, the bill stipulates that non-registered or non-compliant entities are confronted with administrative sanctions or criminal sanctions.
Blockchain for governance and digital identity
In addition to the financial regulation, the bill encourages the use of blockchain in public administration. It sketches provisions for digital identity systems and the issue of tokenized effects, aimed at reducing bureaucratic inefficiencies and promoting transparency in both public and private sectors.
The legislation also authorizes smart contracts, which recognizes their legal enforceability under Panamanian law. The laws see this as an opportunity to make innovative financial products possible and to automate business processes through programmable agreements.
If adopted, the bill would mark an important policy shift after an earlier crypto law-adopted by the legislative power in 2022 has been awarded by the then President Laurentino Cortizo, who expressed concern about legal gaps and constitutional inconsistencies.
The new design is concerned by clearly defending the role of regulatory authorities, including the UAF and the Superintendency of Banken van Panama.
In the coming weeks, the draft law is expected to switch to commission discussions in the National Assembly, where the changes can undergo before it is voted.
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