The adoption of cryptocurrency in Panama might be uncertain following President Cortizo’s demand to include anti-financial crime provisions in the bill before being assented to.
Panama’s President Laurentino Cortizo stated on Thursday that he will not sign the pending crypto bill into law until strict anti-money laundering provisions are included. The decision put pressure on crypto exchanges and companies that were already planning to enter the new market.
Panama’s legislative assembly passed a bill last month regulating cryptocurrency use and licensing crypto exchanges in the country. However, cryptocurrency adoption in Panama is uncertain until the president signs the bill.
Panama’s President Suspends The Signing Of A Crypto Law
According to Bloomberg, Panama’s President Laurentino Cortizo believes anti-money laundering regulations are critical for the country because Panama has been targeted for money laundering and other financial crimes. Panama has been added to the Financial Action Task Force’s (FATF) “gray list” of countries with lax anti-money laundering laws.
“If I’m going to answer you right now with the information that I have, which is not enough, I will not sign that law. I have to be very careful if the law has clauses related to money laundering activities. Anti-money laundering activities are very important to us.”
The Cortizo administration is currently implementing FATF recommendations to prevent money laundering, terrorist financing, and financial crimes. Anti-money laundering regulations are beneficial to cryptocurrency regulation. The use and commercialization of crypto assets in the country could improve offshore financial services even more.
The private and public use of crypto assets will benefit Panama’s financial services system. Furthermore, due to widespread internet use, banks will become more crypto-friendly, and crypto assets may assist the unbanked.
According to Panamanian lawmaker Gabriel Silva, the bill allows for the trading and use of crypto assets, the issuance of digital securities, new payment systems, and the tokenization of precious metals.
However, experts believe that the acceptance of cryptocurrency will make Panama a place with little financial transparency. Crypto payments bypass due diligence processes, potentially putting Panama in a bad position.
Crypto Exchanges Enter The Panama Market
After the assembly passed the crypto bill, crypto exchanges and firms are already preparing to enter Panama.
Deribit, a cryptocurrency derivatives exchange, had already relocated to Panama while expanding KYC requirements. Crypto firms and exchanges looking to expand now face uncertainty.
Crypto adoption is increasing in Panama as people become more interested in digital assets, NFTs, metaverse, and so on. The government is taking a close look at the use of blockchain technology.
