- Panama has introduced a draft bill that would regulate cryptocurrency, establish licensing for virtual asset service providers (VASPs), and integrate blockchain into government processes.
- The bill aims to attract crypto companies like Binance, PayPal, and Coinbase by creating a legal framework, that would allow them to operate directly in the country and contribute to economic growth.
Panama has introduced a new draft bill to help regulate all crypto assets and also support blockchain growth. The proposal aims to position the country as a fintech leader in the whole of Latin America.
The bill contains various rules for legalizing the voluntary use of cryptocurrency for payments, setting rules for virtual asset service providers (VASPs), and also using blockchain to improve government operations.
Panama’s Draft Bill for Crypto and Blockchain Regulation
Panama is moving toward regulating cryptocurrency while boosting the country’s digital economy. The new bill, which was introduced by the Substitute Representative Gabriel Solis, is set to provide legal clarity and establish license and capital requirements for all virtual asset service providers (VASPs), while also creating a supervisory body. The bill would also create an incentive for all crypto businesses and allow people to use digital assets for payments.
While helping citizens in the country, it would also enable the government to use blockchain for property records, tax collection, and identity verification. Previously, Panama had no clear legal stance on crypto assets, which exposed users to risks. If the bill gets approved, cryptocurrencies like Bitcoin and Ethereum could become recognized payment options, provided both parties agree.
The bill also mandates VASPs to register in a national database and comply with Know-Your-Customer (KYC) and anti-money laundering (AML) rules. All bodies who do not comply could face penalties. This move aligns Panama with countries like the USA and Chile in embracing crypto adoption.
Panama currently doesn’t have any legal regulations for crypto companies like Binance, PayPal, and Coinbase, preventing them from operating directly with citizens in the country. Due to this, residents must use third-party apps for all crypto-related transactions. The bill states that once the new regulations are approved, these companies will be able to set up branches in Panama, which would also act as a revenue for creating jobs and boosting the economy.
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