Panama’s Supreme Court is set to make a historic decision about the future of the local cryptocurrency industry. The Supreme Court will decide on Bill No. 697, which was sent for review by the President of Panama, Laurentino Cortizo.
Panama Supreme Court to decide on crypto future
The Panamanian President sent a crypto bill passed last year to the Supreme Court for review. President Cortizo has argued that the crypto bill violated the core principles of the constitution and could not be enforced.
An official statement from the President’s office said that articles 34 and 36 of this bill were unenforceable because they failed to conform with the separation of powers in the state and fell short of recognizing the administrative structures already established.
The President also noted that this bill was passed without following the appropriate procedures. He first vetoed the bill in June of last year after saying that the bill needed to be amended to comply with the new regulatory framework proposed by the Financial Action Task Force (FATF). The FATF’s regulatory framework aims at combating money laundering and boosting transparency.
The executive branch and the legislative branch of the Panamanian government have been at loggerheads about this bill. The proposal was initially passed by Panama legislatures in April last year after being introduced in September 2021. The bill focuses on regulating crypto activities in the country. Shortly after the bill was passed, President Cortizo said he would not sign it into law because it lacked provisions on anti-money laundering.
Contents of the contentious Panamanian crypto bill
The bill aims at making Panama a hub for crypto assets, blockchain technology, and the internet. Under this bill, Panamanians can use cryptocurrencies as a means of payment for civil or commercial operations. It also seeks to lower the barrier between traditional financial systems and the crypto industry.
The main promoter of this bill is lawmaker Gabriel da Silva, who noted that the legislation was broad in scope as it covered not only cryptocurrencies but also other digital assets. The bill also addresses the tokenization of precious metals and how such products will be regulated.
It also explores the adoption of blockchain technology in multiple areas, such as digitizing identities. The country’s innovation authority would assess such use cases. Moreover, the bill could also help the unbanked population in Panama. While the country has a high internet penetration rate, only one in four people have bank accounts, a gap that the crypto industry could fill.
While this bill could promote the crypto industry’s growth in the country, it could affect Panama’s status as a tax haven, making the country appear less transparent. However, the passing of this bill depends on the decision that the Supreme Court will make, and it could set precedence for the crypto regulatory framework in Panama.
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