Panama Crypto Bill Authorizes Voluntary Digital Payments

Panama has introduced a comprehensive draft bill aimed at integrating cryptocurrencies into its financial landscape. The proposed legislation outlines a legal framework for voluntary crypto payments, rigorous licensing requirements for Virtual Asset Service Providers (VASPs), and blockchain-based innovations across the public sector. If passed, the measure could position the country as a prominent fintech hub in Latin America.

Legal Recognition of Digital Assets

Under the Panama Crypto Bill, individuals and businesses can freely opt to use digital assets like Bitcoin and Ethereum as payment for goods and services. The legislation acknowledges these tokens as valid means of exchange, ensuring that both parties can settle commercial or civil contracts using cryptocurrencies. The bill also extends explicit authorization for stablecoins to be used in day-to-day transactions, provided there is mutual consent.

VASP Licensing and Compliance

To strengthen consumer protection and align with international standards, the draft law requires Virtual Asset Service Providers—such as exchanges, custody platforms, and wallets—to register in a national database overseen by the Financial Analysis Unit (UAF). They must obtain authorization prior to operating in Panama. Compliance standards include Know-Your-Customer (KYC) protocols and strict anti-money laundering (AML) rules set by the Financial Action Task Force (FATF). Non-compliant entities could face administrative fines or criminal charges, reinforcing the government’s intent to maintain a secure and transparent environment.

Blockchain for Governance and Innovation

In addition to financial regulations, the bill seeks to expand blockchain use in public administration. Lawmakers plan to establish digital identity systems and enable tokenized securities, speeding up bureaucratic processes and improving both efficiency and transparency. Moreover, the legislation gives legal enforceability to smart contracts within Panamanian jurisdiction. Policymakers see this as a gateway to advanced financial offerings—such as automated lending tools or insurance products—constructed via programmable agreements.

Addressing Past Concerns

A previous crypto law passed in 2022 was partially vetoed by then-President Laurentino Cortizo over regulatory and constitutional issues. This new draft aims to close those gaps by clearly defining the roles of oversight authorities, including the UAF and the Superintendency of Banks of Panama. Lawmakers will further discuss and refine the proposal in committee sessions, after which it could be put to a vote in the National Assembly. If successfully enacted, the Panama Crypto Bill may serve as a blueprint for future fintech legislation in the region.