The saga of Panama’s crypto bill has reached a new chapter, with the country’s Supreme Court deciding the future of the local crypto industry.
Panamanian President Laurentino Cortizo sent Bill No. 697, dubbed the “crypto bill,” to the Supreme Court for review and approval on Jan. 26, after rejecting the legislation, claiming it violated fundamental principles of the national constitution and was inapplicable.
The Supreme Court must now decide whether to declare the legislation unenforceable or approve it with modifications.
According to an official statement, the government considers articles 34 and 36 of the bill inapplicable, since they violate the separation of powers of the State and establish administrative structures within the government.
President Cortizo also argued that the bill had been passed through an improper procedure, following his partial veto of the legislation in June. At the time, the president felt that the bill needed more work to meet new standards recommended by the Financial Action Task Force (FATF) on “fiscal transparency and the prevention of money laundering.”
A dispute between the Panamanian congress and the government has centered on this bill. In April 2022, Panamanian legislators approved the legislative proposal aimed at regulating cryptocurrencies in the country, including Bitcoin. President Cortizo, however, warned a few weeks later that he would not sign it unless it included additional regulations against money laundering.
The bill was presented in September 2021 to the National Assembly of Panama, with the aim of making the country “suitable for the digital economy, blockchain, crypto assets and the Internet.” It left the Economic Affairs Commission on April 21 before being approved by the local Congress.
Based on the legislation, Panamanians “may freely agree to the use of crypto assets, including, but not limited to, Bitcoin and Ethereum” as a payment alternative for “any civil or commercial operation.”
Additionally, the bill would regulate the tokenization of precious metals and the issuance of digital securities. Identity digitization using blockchain or distributed ledger technology would also be explored by the government’s innovation authority.
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