President Laurentino Cortizo has partially vetoed the proposed bill aimed at regulating the use of cryptocurrency in Panama. This comes after Panama’s legislature approved the bill in late April.
In 2021, El Salvador became the first country in the world where Bitcoin is legal tender. Now, Panama was close to becoming the second Latin America nation that allows citizens to spend crypto on its territory.
President Cortizo has cited the lack of guarantees that the proposed law would comply with global anti-money laundering practices. He has stated that an adaptation of Panama’s financial system would be required before he could sign the bill.
If the bill was signed, it would have let Panamanians buy everyday goods with digital assets, such as Bitcoin and Ethereum. Unlike in El Salvador, Panama’s Crypto Law would allow businesses to choose if they wish to accept digital assets as payment or not. In other words, crypto would not be considered a legal tender.
The citizens could have used crypto to pay taxes and other fees to the government. Decentralized autonomies organizations (DAOs) would be formally recognized as legal entities. Moreover, Panama would be able to issue securities and commodities, such as silver and gold, in a tokenized form, by using the security token offerings.
The bill is now returned to Panama’s National Assembly, where it will be further debated.