The saga of Panama’s crypto bills has reached a new chapter, with the country’s Supreme Court deciding the future of the local crypto industry.
Panama’s President Laurentino Cortizo sent On January 26, Bill No. 697, dubbed the “crypto bill,” was sent to the high court for review and approval, after objecting to the legislation, claiming that it violated basic principles of the constitution and that it did not could be enforced.
The Supreme Court must now decide whether to declare the legislation inapplicable or approve it with modifications.
According to According to an official statement, the government considers articles 34 and 36 of the bill inapplicable, since they violate the separation of powers of the State and establish administrative structures within the government.
President Cortizo also argued that the bill had been approved through an improper procedure, following his partial veto of the legislation in June. At the time, the president felt that the bill needed more work to comply with new regulations recommended by the Financial Action Task Force (FATF) that outline “fiscal transparency and the prevention of money laundering.”
Related: The 5 most important regulatory developments for cryptocurrencies in 2022
A dispute between the Panamanian congress and the government has centered on this bill. In April 2022, the legislators of Panama approved the legislative proposal with the objective of regulating cryptocurrencies in the country, including Bitcoin. President Cortizo, however, warned a few weeks later that he would not sign it unless it included additional anti-money laundering (AML) rules.
The bill was presented in September 2021 to the National Assembly of Panama, with the aim of making the country “compatible with the digital economy, blockchain, crypto assets and the Internet.” It was removed from the Economic Affairs Committee on April 21 before being approved by the local congress.
Based on the legislation, Panamanians “may freely agree to the use of crypto assets, including, among others, Bitcoin and Ethereum” as an alternative payment for “any civil or commercial operation.”
Additionally, the bill would regulate the tokenization of precious metals and the issuance of digital value. The government’s innovation authority would also explore the digitization of identity using blockchain or distributed ledger technology.
