President Of Panama Vetoes Crypto Bill By Citing FATF Guidelines

Despite the past praise for crypto legislation in Panama, the president’s concerns over anti-money laundering measures have re-ignited debate.

Panama President Laurentino Cortizo has partially vetoed Bill No. 697, called the “crypto bill,” claiming that it needs additional development to be more compatible with Panama’s financial standards.

After Panama’s National Assembly passed the crypto bill in late April 2022, President Cortizo had warned in May that he would not sign it unless it added extra anti-money laundering rules.

According to local media source La Prenda, which received a copy of the 32-page veto, the President noted that it is “imperative” that cryptocurrency rules conform to new norms established by the Financial Action Task Force (FATF) establishing “fiscal transparency and money laundering prevention.”

President Cortizo has previously hailed the measure as an “innovation law,” and has signaled support for certain sections of the plan, but has stated that potential illegal applications of cryptocurrencies must be addressed.

Congressman Gabriel Silva, who helped introduce the law in September 2021, said on June 16 that the veto was a “missed opportunity to produce jobs, attract investment, and embrace technology and creativity in the public sector,” according to a translation.

“The country deserves more chances and financial inclusion,” Silva remarked, adding that Congress will review the veto to make changes that would then be debated.

If the bill is eventually enacted, Panama will become the second Central American country to control cryptocurrency spending. El Salvador, a neighboring country, was famed for being the first to make Bitcoin (BTC) legal tender.

In contrast to El Salvador, Panama’s measure covers cryptocurrencies other than Bitcoin and does not force local firms to accept digital assets.

Panamanians “may freely agree on the usage of crypto assets, including without limitation Bitcoin and Ethereum (ETH),” according to the bill, as an alternative payment for “any civil or commercial operation.”

The measure would also govern the issue of digital currency and the tokenization of commodities such as precious metals. The government’s innovation authority would also investigate identity digitalization using blockchain or distributed ledger technologies.