In the following weeks, the approval of a Crypto Law will be studied in Panama with its proponents and opponents vehemently debating about it. Although there is still no definitive conclusion, at Panama Living we want to share some of the opportunities this law would provide the country.
The bill in question seeks to regulate the commercialization and use of cryptocurrencies and aims to place Panama behind the modernization of its payment system, betting on proactively managing the crypto active market.
This bill is not only limited to cryptocurrencies as such, but also seeks to include fintech platforms, digital wallets, and crowdfunding platforms, among others; all tools that are already used in other markets.
Through this, it seeks to create a new type of financial license, called a redeemable digital value entity. This would update the Panamanian regulatory infrastructure and allow the country to fully participate in a crypto active market with more than 150 million users worldwide and in the next few years, they could even reach one billion.
The proponents of this regulation also point out that it will favor financial inclusion and increase the competitiveness of the Panamanian financial system as a whole, both inside and outside it.
In Panama, only 47% of the population has a bank account, almost 8% below the regional average and 39% below the global average.
Felipe Echandi, CEO of the quantum digital payment platform and one of the most vocal people in the industry, pointed out to journalist Katiuska Hernández from Martes Financiero that this bill would “imply significant growth in the total financial market; providing you with additional funds and jobs that would make the promise of financial inclusion a reality.”
Along with economic advantages, the opportunities in terms of international regulations that this law would imply are also important. Mainly by giving legal clarity to crypto assets, it would gain importance on two fronts. First, these crypto assets must pay taxes, and second, along with the regulation, the risks of money laundering are mitigated while complying with the recommendations of the International Financial Action Task Force.
There are discordant voices concerning this bill, and although they are not opposed to it, they seek to clarify or change certain aspects. One of them is the Superintendence of the Financial System, which points out the risks that this law may imply for Panama when they are evaluated by FATF. They also maintain that in some areas, this proposal brings together issues that, in the regulator’s opinion, could be treated separately, suggesting a specific law be drafted for crypto actives and another for matters concerning digital payments.
Undoubtedly, the Crypto Law proposal, and the modernization that it would imply for the Panamanian financial system, will significantly contribute to consolidating Panama as the financial center of the future for Latin America and the world in the same way that the country has known how to position itself as an international banking center.
The bill is not a set issue, so we invite you to stay tuned for future updates that Panama Living will prepare for you. Do you have another current economic topic in Panama that you would like to know about? Let us know by sending an email to editor@panamaliving.com
