• Tue. Aug 2nd, 2022

Panamanian President Partially Vetoes Digital Currency Regulation Bill

ByHazel R. Lang

Jun 21, 2022

Panamanian President Laurentino Cortizo has passed a partial veto on the “crypto bill” that the country’s parliament sent to his office for signing. President Cortizo sent the bill back to the legislature for further debate on the issues he highlighted.

According to local media La Prensa, which obtained a copy of the veto notice, the president’s main concern is that the bill does not sufficiently adapt digital assets to the rules that govern the Panamanian banking system.

President Cortizo had previously voiced these concerns. He said in May that he was unlikely to sign the bill in its current form during a speech at a Bloomberg event. He added that his team was studying the bill to judge its level of compliance with the anti-money laundering laws that Panama was trying to implement.

“I have to be very careful if the law contains clauses related to money laundering activities. Anti-money laundering activities are very important to us,” Cortizo said at the time.

Partial veto means that he has only rejected certain provisions of the bill without vetoing it in its entirety. Bill 697 will now be further debated only on those aspects that were vetoed in the Panamanian Parliament.

In a TweeterGabriel Silva, the MP who helped draft the bill, described the president’s action as “a lost opportunity to create jobs, attract investment and bring technology and innovation to the sector. audience”.

Silva added that parliament would focus on keeping the law competitive. Silva first introduced the bill in 2021. The House passed the bill in April.

Panama and digital currency adoption

The bill, if eventually passed into law, will allow digital currencies to be used for payments for various goods and services in the country, including taxes. It will also recognize Decentralized Autonomous Organizations (DAOs) and establish the framework for the government to use blockchain technology for record keeping.

However, the president is not keen on the bill as it could set back the country’s campaign to repair its reputation among international financial watchdogs. Panama’s status as a tax haven has put it on the alert list of organizations like the Financial Action Task Force (FATF).

As Bloomberg reports, the Latin American country has already implemented the FATF recommendations. Panama is also not the only Latin American country seriously considering digital currency adoption. Others like Argentina, Honduras and Brazil are looking to follow in El Salvador’s footsteps in one way or another.

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