Is Crypto Legal in Panama?
Cryptocurrency is legal but heavily restricted in Panama. The jurisdiction has a restrictive regime with banking or trading constraints. Ministry of Commerce and Industries is among the 3 regulators with oversight. Primary legislation: Law 93 of 2019, regulated by Decree 840 of 2020.
Derived from 303 sourced facts for Panama · last updated · primary sources
Overview
Panama operates without a dedicated, fully enacted VASP framework — Law 1 of January 5, 2024 amended Law 23 of 2015 to define virtual assets and VASPs and assigned the Superintendency of Banks of Panama (SBP) as the primary licensing and supervisory authority, while crypto offerings with securities characteristics fall under the Superintendencia del Mercado de Valores (SMV) via Law Decree 1 of 1999. Licensed VASPs and obligated subjects must satisfy AML/CFT duties under Law 23 of 2015 and Executive Decree 44 of 2016 — including KYC, customer due diligence, and suspicious transaction reporting to the UAF — though no Travel Rule instrument specific to VASPs is yet in force. Panama was removed from the FATF grey list in October 2023, and the 2024 amendments represent a transition in progress, meaning operational requirements under the SBP licensing regime may not yet be fully implemented or detailed in secondary regulation. (superbancos.gob.pa, gacetaoficial.gob.pa, smv.gob.pa)
Regulatory Bodies
Obtain a business license ("Aviso de Operación") from the Ministry of Commerce and Industries.
Law 1 of January 5, 2024 (Ley No. 1 de 5 de enero de 2024): This is the most crucial and recent piece of legislation specifically for virtual assets.
Exploration Phase: Panama's central bank (National Bank of Panama - BNP) has publicly indicated an interest in exploring Central Bank Digital Currencies (CBDCs), but it is primarily in the research and study phase.
Operating Models
9/9 verdictsCan specific business models operate in Panama? Each card answers the operational question for one kind of operator. Curated cells reflect counsel-grade review; AI-generated cells should be confirmed before relying on them.
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AI · UnreviewedPrimary Legislation
| Law / Regulation | Year | Scope |
|---|---|---|
| The National Council for Accreditation (CNA), created by Law 23 of July 15, 1997 | 1997 | The National Council for Accreditation (CNA), created by Law 23 of July 15, 1997, handles accreditations for laboratories, inspection organizations, and certifying organizations; as of September 2021, 62 organizations had been accredited,… |
| Law 93 of 2019, regulated by Decree 840 of 2020 | 2019 | Panama offers investment incentives through the Multinational Headquarters Law, the Multinational Manufacturing Services Law, and the Public-Private Partnership Law (Law 93 of 2019, regulated by Decree 840 of 2020); entities carrying out a… |
| Panama's general standards framework, overseen by DGNTI and COPANIT under Law 23 | 1997 | Panama's general standards framework, overseen by DGNTI and COPANIT under Law 23 of 1997, has not addressed blockchain, digital assets, or Web3, leaving a regulatory vacuum. |
Licensing Requirements
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AML/KYC Requirements
Law 23 of April 27, 2015 (Ley 23 de 27 de abril de 2015): This is the foundational AML/CFT law in Panama. It adopted measures to prevent money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction. It established the Financial Analysis Unit (UAF) and defined "obligated subjects" (sujetos obligados), which, through subsequent interpretations and amendments, have come to include VASPs. This law sets general obligations for customer due diligence, suspicious transaction reporting, and record-keeping.
Executive Decree 44 of April 15, 2016 (Decreto Ejecutivo N° 44 de 15 de abril de 2016): This decree complements Law 23, providing detailed regulations for its application, including specific procedures for due diligence, risk assessment, and internal controls for obligated subjects.
Law 1 of January 5, 2024 (Ley No. 1 de 5 de enero de 2024): This is the most crucial and recent piece of legislation specifically for virtual assets. It amends Law 23 of 2015 and other related laws to define virtual assets and virtual asset service providers (VASPs), establish a licensing and supervision regime, and explicitly subject VASPs to AML/CFT obligations under the supervision of the Superintendency of Banks of Panama (SBP). This law ensures Panama's compliance with FATF Recommendation 15 on new technologies and VASPs.
Role: With the enactment of Law 1 of 2024, the SBP is now the primary regulatory and supervisory authority responsible for the licensing, authorization, and oversight of VASPs in Panama. This includes ensuring their compliance with AML/CFT requirements, operational standards, and consumer protection.
Role: The UAF is Panama's Financial Intelligence Unit (FIU). It is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other relevant financial intelligence to combat money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction. VASPs, as obligated subjects, must report suspicious activities directly to the UAF.
For Individuals: Obtaining and verifying the identity of the customer and beneficial owner (if different from the customer) using reliable, independent source documents, data, or information (e.g., government-issued ID, passport, proof of address).
For Legal Entities/Arrangements: Obtaining and verifying the legal name, legal form, proof of existence, powers that regulate and bind the entity, names of relevant persons (directors, partners), and the identity of beneficial owners (those ultimately owning or controlling more than a specified percentage, typically 10% or 25%).
Understanding the Purpose and Nature of the Business Relationship: Gathering information on the customer's financial activities, expected transaction types, and the source of funds/wealth.
Ongoing Monitoring: Continuously monitoring the business relationship and transactions to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile. This includes scrutinizing complex, unusual large transactions, and all unusual patterns of transactions that have no apparent economic or lawful purpose.
Enhanced Due Diligence (EDD): Applying EDD measures for high-risk customers, business relationships, or transactions, which include:
Politically Exposed Persons (PEPs) and their family members and close associates.
Customers from high-risk jurisdictions identified by FATF or local authorities.
Transactions involving new or developing technologies that might favor anonymity.
Obtaining additional information on the customer, beneficial owner, source of funds/wealth, and reasons for intended transactions.
Obtaining senior management approval for establishing or continuing high-risk relationships.
Simplified Due Diligence (SDD): Permitted in clearly defined low-risk scenarios, provided there is sufficient information to justify such an approach.
Obligation to Report: VASPs are legally obligated to report any suspicious transaction or activity to the UAF, regardless of the amount. A transaction is suspicious if the VASP has reasonable grounds to suspect that it may be related to money laundering, terrorism financing, or other illicit activities.
No Tipping-Off: VASPs, their employees, and officers are prohibited from disclosing to the customer or any third party that an STR has been or will be submitted.
Content of Report: STRs must include all relevant information available to the VASP, such as customer identification details, transaction specifics, and the grounds for suspicion.
Duration: Records must typically be kept for at least five (5) years after the business relationship has ended or after the date of the transaction.
All customer identification and verification data obtained through CDD/EDD processes.
Transaction records, including the amount, currency, date, and parties involved (including "Travel Rule" information for virtual asset transfers).
Records of analysis undertaken for suspicious transactions.
Internal policies, procedures, and training materials.
Risk Assessment: Conducting a comprehensive risk assessment of their business, customers, products, services, and geographical areas of operation to identify, assess, and understand their ML/TF risks.
Designated Compliance Officer: Appointing a qualified AML/CFT compliance officer at a senior management level, responsible for overseeing the implementation and effectiveness of the AML/CFT program.
Internal Policies and Procedures: Developing and implementing clear internal policies, procedures, and controls to mitigate identified risks and ensure compliance with AML/CFT obligations.
Training: Providing regular and ongoing AML/CFT training to all relevant employees to ensure they understand their obligations and can identify and report suspicious activities.
Independent Audit: Establishing an independent audit function to periodically test the effectiveness of the AML/CFT program.
"Travel Rule" Compliance: As per FATF recommendations, VASPs must transmit required originator and beneficiary information (name, account number, physical address, national ID number, customer ID number, date and place of birth, etc.) for virtual asset transfers above a certain threshold (typically equivalent to USD 1,000) to the beneficiary VASP, and vice versa.
No explicit classification: Due to the lack of specific stablecoin legislation, Panama has not explicitly classified stablecoins as e-money, payment tokens, or securities under a dedicated framework.
E-money/Payment Tokens: If a stablecoin is pegged to a fiat currency (e.g., USD) and primarily functions as a means of payment or value transfer, it could potentially be interpreted as an electronic payment instrument or a form of e-money, bringing it under the purview of the Superintendencia de Bancos de Panamá (SBP), which regulates banks and financial institutions. This would necessitate compliance with existing banking and payment services regulations.
Commodity/Other: If a stablecoin is backed by a commodity or has other unique characteristics, its classification would be assessed on a case-by-case basis.
No specific stablecoin reserve requirements: As there is no dedicated stablecoin regulation, there are no specific reserve requirements for stablecoin issuers.
Potential requirements if classified otherwise: If a stablecoin issuer were to be classified as a bank, e-money issuer, or financial entity under the SBP's jurisdiction, then the existing capital, liquidity, and reserve requirements for those regulated entities would apply. This would typically involve holding sufficient liquid assets (fiat currency, government bonds) to cover liabilities.
No specific stablecoin issuer license: Panama does not have a specific license for stablecoin issuers.
If the stablecoin activity is deemed banking or e-money issuance, the entity would likely need a banking or financial services license from the Superintendencia de Bancos de Panamá (SBP). Obtaining such a license is a rigorous and lengthy process.
If the stablecoin is deemed a security, the issuer and any platforms facilitating its trading would need to comply with the licensing requirements of the Superintendencia del Mercado de Valores (SMV) for securities issuers, brokers, or exchanges.
AML/CFT Registration: All entities dealing with financial transactions, including those potentially involving crypto assets, are subject to the Financial Analysis Unit (UAF - Unidad de Análisis Financiero) regulations regarding AML/CFT. Even in the absence of a specific crypto license, entities involved in facilitating crypto transactions would need to comply with reporting obligations.
No explicit stablecoin redemption rights legislation: There are no specific laws in Panama mandating redemption rights for stablecoin holders.
Reliance on general contract law/terms of service: Redemption rights would primarily be governed by the terms and conditions set forth by the stablecoin issuer and the smart contract (if applicable). General consumer protection laws or contract law could provide a basis for disputes, but a specific framework for stablecoins is absent.
None: Given the lack of a basic regulatory framework for even fiat-backed stablecoins, there are no specific rules or prohibitions regarding algorithmic stablecoins in Panama. Such assets would likely face even greater scrutiny if they were to achieve significant traction, given their inherent volatility risks.
Exploration Phase: Panama's central bank (National Bank of Panama - BNP) has publicly indicated an interest in exploring Central Bank Digital Currencies (CBDCs), but it is primarily in the research and study phase. There are no concrete plans for issuance or specific policies on how a Panamanian CBDC would interact with private stablecoins.
Currently, there is no direct regulatory interaction or framework defined for private stablecoins in relation to a potential Panamanian CBDC, as the latter is still conceptual.
Ley No. 697 de 2022 (Vetoed in part): This law attempted to establish a comprehensive framework for crypto assets. While ultimately vetoed in significant parts, it represents the most direct legislative effort concerning cryptocurrencies.
Reference: Gaceta Oficial Digital, No. 29541-A (May 2022). (Finding a direct official URL for the fully passed and vetoed version can be challenging due to the dynamic nature; often news sources provide summaries.)
Panama's Presidency Veto Statement (Spanish): Search "Comunicado de Prensa de la Presidencia de la República de Panamá Veto Ley de Criptoactivos" (Specific URL may vary).
Regulates banking and financial institutions. Relevant if stablecoins are deemed e-money or deposit-like.
Regulates securities markets. Relevant if stablecoins are deemed securities.
Panama's Financial Intelligence Unit, responsible for AML/CFT regulations and reporting. All financial sector participants must comply.
FATF (Financial Action Task Force): Panama's ongoing efforts to comply with FATF recommendations heavily influence its approach to financial regulation, particularly concerning new technologies like crypto assets.
Travel Rule
No specific, comprehensive law for virtual assets and VASPs fully implementing the Travel Rule has been adopted and made effective.
There was a significant legislative attempt: Law 69 of 2022 (Proyecto de Ley 697), which aimed to regulate the commercialization and use of crypto assets and issue specific provisions for VASPs. This law would have incorporated FATF standards, including potentially aspects of the Travel Rule.
Status of Law 69/2022: This law was vetoed by the President of Panama in June 2022, primarily due to concerns about its scope, regulatory framework, and potential implications for financial stability and existing AML/CFT efforts. This means it did not become law.
Current Situation: In the absence of specific crypto legislation, existing general AML/CFT laws (like Law 23 of 2015) and regulations may apply to activities involving virtual assets if they fall under the definition of financial services or other regulated activities, but this application is often indirect and does not fully address the Travel Rule's specific requirements for VAs.
Since a dedicated law has not been adopted, there is no specific effective date for the Travel Rule for VASPs in Panama.
Existing AML/CFT regulations have their own effective dates, but they are not tailored for the VASP Travel Rule.
Without specific VASP legislation, there are no specific threshold amounts established for the Travel Rule in Panama.
General AML/CFT thresholds for reporting suspicious transactions or cash transactions in traditional financial services (e.g., typically above USD 10,000 for cash transactions) exist under Law 23 of 2015, but these are not directly applicable to the Travel Rule for VAs.
This is currently ambiguous due to the lack of dedicated legislation.
Under the proposed (and vetoed) Law 69 of 2022, a broad range of entities involved in virtual asset activities would have been covered, including exchanges, custodians, wallet providers, and other service providers facilitating VA transfers.
Currently, the Superintendency of Banks of Panama (SBP) and the Financial Analysis Unit (UAF) monitor activities that may fall under their existing purviews if they are deemed to interact with the traditional financial system or pose specific AML/CFT risks. However, there isn't a clear licensing or registration regime for all types of VASPs.
Since there's no specific law or regulation for the Travel Rule for VAs, there are no mandated technical implementation requirements.
In the absence of clear regulatory guidance, any VASPs operating in Panama and attempting to comply with international best practices (or internal compliance programs due to cross-border operations) would likely look to global solutions like TRISA, OpenVASP, or other Travel Rule Protocol (TRP) solutions.
Given the lack of specific Travel Rule legislation, there are no specific penalties defined for non-compliance with the Travel Rule for VAs.
However, if a VASP (or an entity performing VASP-like activities) is found to be operating in violation of existing general AML/CFT laws (e.g., for failing to report suspicious transactions, not having adequate customer due diligence, or facilitating money laundering), they would be subject to the penalties outlined in those laws.
Law 23 of 2015 (which sets out the AML/CFT framework for many regulated entities) includes administrative sanctions (fines) and criminal penalties (imprisonment) for individuals and legal entities involved in money laundering, terrorism financing, and related breaches of AML/CFT obligations.
Law 23 of 2015 (Ley 23 de 27 de abril de 2015): "Que adopta medidas para prevenir el blanqueo de capitales, el financiamiento del terrorismo y el financiamiento de la proliferación de armas de destrucción masiva, y dicta otras disposiciones." This is Panama's primary AML/CFT law that establishes obligations for various financial and non-financial entities.
URL (Spanish): https://www.asamblea.gob.pa/APPS/LEGISLATURAS/PDF_LEYES/2010/2015/2015_361_2077.pdf (Note: This is a direct PDF link, official source from the National Assembly of Panama)
Proyecto de Ley 697 (Vetoed Law 69 of 2022): While vetoed, its existence highlights the legislative intent.
Information on the veto (Spanish): Various news outlets reported on the veto, e.g., La Estrella de Panamá, Prensa.com. Searching "Presidente Veta Ley Cripto Panamá" would yield results.
GAFILAT Mutual Evaluation Reports: As a member of GAFILAT (the FATF-style regional body for Latin America), Panama undergoes regular assessments. The latest follow-up reports often highlight the country's progress (or lack thereof) in implementing FATF recommendations, including those related to virtual assets (Recommendations 15 and 16).
The 4th Round Mutual Evaluation Report of Panama (originally 2017) and subsequent Follow-Up Reports are the most authoritative public sources on Panama's compliance with FATF Recommendations.
URL for GAFILAT Reports (search for Panama): https://www.gafilat.org/index.php/es/biblioteca/documentos-de-evaluacion-mutua
The Follow-Up Report for Panama published in July 2023 would be the most relevant to check for recent assessments on VAs/VASPs. It notes that Panama has improved some aspects of its AML/CFT framework but often still has strategic deficiencies, particularly in newer areas like VAs. It's likely to rate compliance with R.15 (new technologies) and R.16 (wire transfers, applied to VAs) as only partially compliant or non-compliant for VAs.
Superintendencia de Bancos de Panamá (SBP): While not directly issuing Travel Rule guidance, the SBP is the primary regulator for financial institutions and has issued some general warnings or guidance related to crypto activities.
Unidad de Análisis Financiero (UAF): Panama's Financial Intelligence Unit (FIU), responsible for receiving and analyzing suspicious transaction reports.
Tax Reporting
Foreign-Sourced Capital Gains: For individuals and businesses resident in Panama, capital gains derived from the trading or sale of cryptocurrencies on foreign exchanges or with non-Panamanian counterparties are generally considered foreign-sourced income. Under the territorial tax system, these gains are not subject to capital gains tax in Panama. This is the most common scenario for crypto investors in Panama.
Panamanian-Sourced Capital Gains: If, theoretically, a capital gain from cryptocurrency could be definitively proven to originate from a source within Panama (e.g., selling crypto through a Panamanian-regulated exchange to a Panamanian counterparty, if such infrastructure existed and was deemed Panamanian-sourced), then it could potentially be subject to general capital gains tax rules.
For the sale of real estate or certain securities within Panama, the capital gains tax rate is typically 10%. However, it is highly unlikely that cryptocurrencies would be uniformly classified as "securities" for this purpose without specific legislation.
General Business Income: If an entity's primary business activity is high-frequency crypto trading within Panama, any profits might be classified as regular business income rather than capital gains, and taxed under corporate income tax rules (see below).
Conclusion: In practice, most crypto capital gains for Panamanian residents are tax-exempt due to the territorial principle.
Foreign-Sourced Income: Similar to capital gains, income earned in cryptocurrency from sources outside Panama (e.g., mining rewards from a global network, staking rewards from foreign pools, salaries paid in crypto by foreign employers, profits from crypto businesses operating exclusively with foreign clients/servers) is generally considered foreign-sourced income and is not subject to Panamanian income tax.
Panamanian-Sourced Income: If cryptocurrency is earned as income from a source within Panama, it would be subject to standard Panamanian income tax rules.
USD 11,001 - USD 50,000: 15% on the excess over USD 11,000
Over USD 50,000: 25% on the excess over USD 50,000, plus USD 5,850
For Businesses (Corporate Income Tax): The standard corporate income tax rate is generally 25% of net taxable income. This would apply if a Panamanian-registered company generated profits in crypto from business activities within Panama (e.g., selling goods/services for crypto domestically, operating a Panamanian-based mining farm selling to Panamanian entities).
Conclusion: The key determinant is the source of the income. Most crypto-related income for Panamanian residents/businesses will likely fall under the foreign-sourced exemption.
Transfer of Cryptocurrency Itself: The buying, selling, or exchange of cryptocurrency itself is generally not subject to ITBMS. Most jurisdictions treat cryptocurrency as an intangible asset, a medium of exchange, or a financial instrument, rather than a good or service subject to VAT/GST.
Use of Cryptocurrency for Goods/Services: If cryptocurrency is used as a method of payment for goods or services that are otherwise subject to ITBMS in Panama, then the ITBMS would apply to the value of those underlying goods or services. The cryptocurrency merely acts as the consideration for the taxable supply.
Example: If you buy a laptop from a store in Panama and pay with Bitcoin, the 7% ITBMS would apply to the laptop's price, just as if you had paid with USD.
Conclusion: ITBMS applies to the supply of taxable goods and services, not generally to the transfer of cryptocurrency itself.
No Mandatory Declaration for Foreign-Sourced Income: If an individual or business earns foreign-sourced income (including crypto-related gains or income) and is therefore not subject to Panamanian tax, there is generally no requirement to declare this income to the DGI.
Declaration for Panamanian-Sourced Income: If an individual or business generates income or capital gains from crypto that is deemed Panamanian-sourced and thus taxable, they must report this income as part of their regular annual income tax declarations to the DGI, just like any other taxable income.
Accounting Records for Businesses: Businesses that hold, transact in, or accept cryptocurrency as payment should maintain proper accounting records in accordance with Panamanian accounting standards (which are based on IFRS) to accurately reflect their assets, liabilities, income, and expenses. This is for general financial transparency and internal control, not necessarily for a crypto-specific tax filing.
AML/KYC Requirements: While not tax-related, financial institutions, designated non-financial businesses and professions (DNFBPs), and potentially any future Panamanian-regulated crypto entities, are subject to anti-money laundering (AML) and know-your-customer (KYC) regulations. They may have reporting obligations for suspicious transactions to the Unidad de Análisis Financiero (UAF), Panama's financial intelligence unit.
Current State: None. As of now, Panama does not have any specific tax legislation addressing cryptocurrencies or virtual assets. Taxation relies on the existing Fiscal Code and the application of its general principles, particularly the territorial tax system.
Law 69 of 2022 (Vetoed): It's important to note that a broader regulatory bill concerning the commercialization and use of crypto assets (Proyecto de Ley 697, later referred to as Law 69) was passed by the National Assembly in 2022. However, it was subsequently vetoed by the President due to concerns about its alignment with international financial transparency standards, potential risks to the financial system, and AML/CFT vulnerabilities. This bill was primarily regulatory and not specifically a tax law, but its passage would have created a framework that could lead to clearer tax treatment in the future. With the veto, Panama remains without a dedicated crypto regulatory or tax framework.
Dirección General de Ingresos (DGI) – Ministry of Economy and Finance (MEF): This is the official tax authority of Panama. Their website provides general information on Panamanian tax laws, forms, and updates.
Código Fiscal (Fiscal Code of Panama): This is the fundamental law governing taxation in Panama, which establishes the territorial principle and the various tax regimes (income tax, ITBMS, etc.). While a direct link to a specific crypto article is not possible because it doesn't exist, the entire code is the basis.
Access: The Código Fiscal can often be found on the DGI website or the Asamblea Nacional (National Assembly) website, though direct stable links to specific articles can be challenging to provide as legislation is often updated. A general search on the DGI site or official legal databases in Panama would be necessary to consult its full text.
Custody Requirements
Custodial license requirements for digital assets.
Segregation of client assets rules for digital assets.
Insurance or bonding requirements for digital asset custodians.
Cold storage mandates for digital asset custodians.
A formal definition of "qualified custodian" for digital assets.
Panama has a robust AML/CFT framework, primarily driven by international standards from the Financial Action Task Force (FATF).
Law 23 of 2015 (Ley 23 de 2015): This law adopts measures to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction. While it doesn't explicitly mention "digital asset custody," financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) are subject to its requirements. If a crypto business falls under the scope of a DNFBP (e.g., as a money remitter, trust provider, or even a general financial service provider handling significant value transfers), it would need to comply with KYC (Know Your Customer), transaction monitoring, and suspicious activity reporting requirements.
Unidad de Análisis Financiero (UAF - Financial Analysis Unit): This is Panama's Financial Intelligence Unit (FIU) responsible for receiving, analyzing, and disseminating suspicious transaction reports. Any crypto entity engaging in activities that might be considered financial services or value transfers could fall under UAF scrutiny for AML/CFT purposes.
Ley 23 de 2015: https://www.gacetaoficial.gob.pa/pdfTemp/27763_A/53916.pdf (Official Gazette link, in Spanish)
These traditional financial regulators have primarily issued warnings and advisories regarding the risks associated with cryptocurrencies. They have generally clarified that cryptocurrencies are not recognized as legal tender, do not fall under the existing banking or securities laws, and entities dealing with them are not regulated by these bodies unless they offer traditional financial services with crypto as an underlying asset.
They have advised regulated entities to exercise extreme caution and assess risks, including AML/CFT, cybersecurity, and operational risks, if engaging with crypto.
SBP warnings (example, may require navigating their site for current advisories): https://www.superbancos.gob.pa/
SMVP warnings (example, may require navigating their site for current advisories): https://www.smv.gob.pa/
Bill 697 / Law 173 (Proyecto de Ley No. 697 / Ley 173): This bill aimed to regulate the commercialization, use, and issuance of digital assets and create a framework for their recognition, custody, and tokenization. It specifically included provisions for:
Licensing: Establishing a licensing regime for virtual asset service providers (VASPs), which would likely include custodians.
Operational Requirements: Laying out rules for operational security, consumer protection, and potentially aspects like asset segregation.
AML/CFT Integration: Explicitly integrating digital asset businesses into the existing AML/CFT framework.
Regulatory Oversight: Designating regulatory bodies for different aspects of digital assets.
Status: Partially Vetoed: The bill passed the National Assembly in April 2022. However, President Laurentino Cortizo partially vetoed it in June 2022.
Reasons for Veto: The President cited concerns about the bill's lack of alignment with FATF recommendations regarding AML/CFT, potential risks to the financial system, and the need for more robust regulatory oversight and technical clarity. He argued that it did not sufficiently protect the national financial system and investors from money laundering and other illicit activities.
Current Status: The bill was returned to the National Assembly for reconsideration of the vetoed articles. As of now, it remains in legislative limbo, meaning the comprehensive framework it proposed, including specific custody regulations, is not currently in force.
Information about the bill's passage (news articles and parliamentary records often cite "Proyecto de Ley No. 697" or "Law 173"): You would typically find records on the National Assembly of Panama's website. For example, searching their archives for "Proyecto de Ley 697": https://www.asamblea.gob.pa/
News articles from reputable financial news outlets (e.g., Reuters, CoinDesk, Bloomberg) from April-June 2022 would detail the bill's passage and subsequent veto.
Stablecoin Regulation
Stablecoin regulation data collection in progress.
Securities Classification
Panama has enacted Law 697 of 2021, which regulates commercial activities involving virtual assets, marking the first comprehensive legal framework for cryptocurrency in the country. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The law establishes a regulatory framework but does not create a specific licensing regime for virtual asset service providers as of 2025–2026, leaving the practical implementation incomplete. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No dedicated securities regulator has been formally empowered to oversee digital asset securities, and no specific securities licensing regime for crypto exists under Panamanian law. asamblea.gob.pa/legispan-2
There is no evidence that any entity has been licensed to conduct digital asset securities activities in Panama as of the current date. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The practical reality is that while legislation exists on paper, the regulatory infrastructure and enforcement mechanisms for virtual asset securities in Panama remain largely undeveloped and unproven. asamblea.gob.pa/legispan-2
The primary legislative instrument is Law 697 of 2021, officially titled "Que regula las actividades comerciales y los servicios de activos virtuales" (Which regulates commercial activities and virtual asset services), published through the Asamblea Nacional de Panamá. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The law was introduced as Bill 696 during the 2020–2021 legislative period, reflecting Panama's initial attempt to establish statutory recognition of virtual assets in commercial transactions. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The Asamblea Nacional de Panamá (National Assembly) serves as the legislative body that proposed and debated this framework, with the full legislative tracking available through the LEGISPAN system. asamblea.gob.pa/legispan-2
No specific regulatory agency is identified in the available text as having been designated primary authority for virtual asset securities oversight under Law 697. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The official legislative portal for Panama can be accessed through the Asamblea Nacional website infrastructure, which houses legislative records and bill tracking. asamblea.gob.pa/legispan-2
The law's scope is limited to "commercial activities and virtual asset services," and does not specifically address securitization, tokenized securities, or digital asset securities as a distinct category under securities law. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
As of 2025–2026, Panama has not designated a named securities regulator with specific jurisdiction over digital asset securities, and no amendments to the securities laws specifically addressing virtual assets have been identified. asamblea.gob.pa/legispan-2
The Superintendencia del Mercado de Valores (Securities Market Superintendency) of Panama is mentioned in the context of the broader securities framework, but specific grant of authority over cryptocurrency securities under Law 697 is not documented in the available text. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Panama is a member of the Financial Action Task Force (FATF) through the GAFILAT (Financial Action Task Force of Latin America) regional body, but no current mutual evaluation report on Panama's virtual asset regime is cited in the provided materials. asamblea.gob.pa/legispan-2
The legislation's regulatory status remains as enacted law, but implementing regulations that would operationalize the digital asset securities framework have not been produced according to the accessible legislative records. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Law 697 of 2021 does not establish a specific licensing regime with defined license categories, capital thresholds, or application procedures for virtual asset service providers operating in the securities space. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No capital requirements expressed in monetary figures (USD or otherwise) for virtual asset securities firms are specified in Law 697, and no minimum capital thresholds have been published in implementing regulations. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
ZERO entities have been licensed under any virtual asset securities licensing framework in Panama, as no licensing mechanism has been operationalized and no registry of licensed virtual asset service providers exists. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The application timeline for any future licensing regime is unspecified, as the law defers to secondary legislation that has not yet been promulgated. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Structural requirements for licensed entities, including corporate governance, operational resilience, and risk management standards for virtual asset securities businesses, are not enumerated in the available law text. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The law does specify that activities such as exchanging, transferring, or safeguarding virtual assets on behalf of third parties would be subject to regulation, but the precise scope covering these activities under securities laws requires clarification by authorities. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
There is no publicly available application form, fee schedule, or processing procedure for any virtual asset license, confirming the absence of a functional licensing pathway. asamblea.gob.pa/legispan-2
The absence of implementing regulations means that even if an entity wished to seek authorization, there is no clearly defined regulatory counterpart or submission process to follow. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Law 697 references that virtual asset service providers must comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) obligations, aligning with FATF standards applicable to virtual assets. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Customer due diligence (CDD) requirements under Panamanian law would be derived from existing AML statutes applicable to financial institutions, and Law 697 subjects virtual asset businesses to these same obligations. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Suspicious transaction reporting (STR) obligations for virtual asset service providers would be channeled through Panama's Financial Analysis Unit (Unidad de Análisis Financiero), the designated financial intelligence unit, consistent with the law's AML framework. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Record retention requirements for virtual asset transactions follow the general AML standards under Panamanian law, requiring documentation of customer identification and transaction details for statutory periods. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Beneficial ownership transparency obligations apply, requiring virtual asset service providers to identify and verify the ultimate beneficial owners of legal entity customers per Panama's corporate transparency requirements. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The law expects the designated regulatory authority to issue AML-specific guidance for virtual asset service providers, but no such guidance is available as of 2025–2026. asamblea.gob.pa/legispan-2
PEP screening obligations for virtual asset firms align with Panama's national AML law, requiring risk-based identification of customers holding prominent public functions or their family members and close associates. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No enforcement actions, penalties, fines, arrests, or regulatory sanctions against virtual asset service providers for securities violations have been identified in the available Panamanian regulatory sources. asamblea.gob.pa/legispan-2
The lack of an operational regulatory framework means that enforcement mechanisms for virtual asset securities infractions have not been publicly exercised by Panamanian authorities. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No specific cases involving unauthorized virtual asset securities offerings, unlicensed exchange operations, or AML failures by crypto businesses in Panama have been documented in the legislative records reviewed. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No tax guidance has been issued for virtual assets, including digital asset securities, under Panamanian law as of 2025–2026. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The law explicitly covers only commercial and business regulatory aspects of virtual assets, with tax treatment left to the general provisions of Panama's Código Fiscal (Tax Code) which has not been amended to address cryptocurrency. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
No rulings, circulars, or administrative interpretations from Panama's Dirección General de Ingresos (General Directorate of Revenue) regarding taxation of virtual asset securities have been published. asamblea.gob.pa/legispan-2
The absence of implementing regulations under Law 697 creates significant legal uncertainty for businesses attempting to operate virtual asset securities platforms in Panama. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
There is no designated supervisory authority with clear jurisdiction over virtual asset securities, meaning businesses cannot determine which regulator to approach for guidance or authorization. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The lack of licensing mechanism exposes legitimate businesses to regulatory risk while providing a permissive environment for unlicensed actors, creating an uneven playing field. asamblea.gob.pa/legispan-2
No clear legal distinction is drawn between virtual assets that constitute securities versus those that are payments, commodities, or other categories, creating classification uncertainty. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
International compliance expectations from FATF and foreign counterparties may not be met due to Panama's incomplete regulatory infrastructure for virtual asset service providers. asamblea.gob.pa/legispan-2
Businesses face reputational and legal risks from operating in a jurisdiction where the regulatory framework exists in statute but lacks operational meaning in practice. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
The gap between paper law and practical reality means that even compliant businesses cannot secure recognized authorization, while non-compliant operators face no imminent enforcement threat. asamblea.gob.pa/APPS/SEG_LEGIS/PDF_SEG/PDF_SEG_2020/PDF...
Future implementing regulations from the Asamblea Nacional could impose requirements retroactively or with short compliance deadlines, creating transition risk for existing market participants. asamblea.gob.pa/legispan-2
Sanctions & Restrictions
Sanctions data collection in progress.
Enforcement Actions
Evolving Regulatory Framework: Panama has been discussing comprehensive cryptocurrency regulation, most notably with Bill 697, which was partially vetoed in 2022. This lack of a clear, dedicated crypto legal framework means that enforcement would likely fall under existing general financial laws (e.g., anti-money laundering, fraud), making it harder to categorize specifically as "crypto enforcement."
Focus on AML/CFT: Panama was on the FATF grey list until October 2023, which heavily emphasized improving its Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regime. While this pressure indirectly affects crypto (as it's a known vector for financial crime), direct, high-profile enforcement actions against crypto entities with specific fines haven't been widely publicized as a result.
Publicity Practices: Panamanian financial regulators (like the Superintendencia de Bancos de Panamá - SBP, or Superintendencia del Mercado de Valores - SMV, or the Unidad de Análisis Financiero - UAF) may not always publicize enforcement actions with the same level of detail as regulators in jurisdictions like the United States or Europe. Criminal investigations would fall under the Ministerio Público (Public Ministry), and details are often restricted during ongoing proceedings.
Regulator Name: Superintendencia de Bancos de Panamá (SBP) - Banking Superintendent of Panama
Entity Targeted: Financial institutions under its supervision, and the general public. Violation Type (Implied): Operating without proper licensing for financial services involving crypto, and general financial risk to consumers. Penalty Amount: Not applicable (these are warnings, not direct fines).
Date: Ongoing, but prominent warnings were issued in 2022 and 2023.
Outcome: Increased awareness among regulated entities and the public about the risks and the SBP's stance that crypto activities are not regulated by them and do not carry deposit insurance.
The SBP has repeatedly issued statements clarifying that cryptocurrencies are not legal tender in Panama, are not regulated by the SBP, and entities under its supervision (banks) should exercise extreme caution and assess risks related to crypto assets. They have warned against financial institutions engaging in crypto activities without proper risk management and adherence to existing AML/CFT regulations.
SBP Comunicado (Press Release) - 2022: "La Superintendencia de Bancos reitera la no validez de las criptomonedas como medio de pago o moneda de curso legal y la no regulación y supervisión sobre ellas." (The Superintendency of Banks reiterates the invalidity of cryptocurrencies as a means of payment or legal tender and the lack of regulation and supervision over them.)
Superintendencia de Bancos de Panamá Official Website (Navigate to "Comunicados" or "Prensa" for recent statements on crypto risks, often in the context of the failed Bill 697).
Failed Cryptocurrency Law (Bill 697):
In 2022, Panama's National Assembly approved Bill 697, which aimed to regulate crypto assets. However, President Laurentino Cortizo partially vetoed it, citing concerns about its AML/CFT provisions and the need for more robust regulation under the existing framework. This highlights the government's struggle to establish a clear regulatory path, which precedes significant enforcement.
Reuters Article on Veto of Crypto Bill
Bloomberg Article on Panama's Crypto Bill
Regulatory warnings about the risks and unregulated nature of crypto.
An attempt to legislate that faced a partial veto.
An underlying focus on strengthening general AML/CFT frameworks (partially due to FATF pressure).
Research & Articles
Regulatory Forecast
high confidenceLikely enforcement action expected around 2026-11-22
Based on 50 historical regulatory events for Panama, averaging every 214 days, with increasing regulatory activity.
Recent Updates
Simplified Due Diligence (SDD): Permitted in clearly defined low-risk scenarios, provided there is sufficient inf...
Simplified Due Diligence (SDD): Permitted in clearly defined low-risk scenarios, provided there is sufficient information to justify such an approach.
Regulator Name: Superintendencia de Bancos de Panamá (SBP) - Banking Superintendent of Panama
Regulator Name: Superintendencia de Bancos de Panamá (SBP) - Banking Superintendent of Panama
No Crypto-Specific Licensing Regime: As of late 2023 / early 2024, there is no specific "virtual asset license" i...
No Crypto-Specific Licensing Regime: As of late 2023 / early 2024, there is no specific "virtual asset license" in Panama issued by a dedicated crypto regulator.
Relevance: Less likely to directly regulate pure crypto activities unless they involve fiat currency in a way tha...
Relevance: Less likely to directly regulate pure crypto activities unless they involve fiat currency in a way that resembles traditional banking or payment services.
Applicability: If an exchange, custody provider, or payment processor holds significant fiat balances for clients...
Applicability: If an exchange, custody provider, or payment processor holds significant fiat balances for clients, offers fiat-to-crypto conversion with a "trust" element, or provides services that closely mimic those of licensed financial institutions (e.g., issuing payment instruments that are essentially fiat-backed digital money), the SBP might assert jurisdiction. This is a high bar, as the SBP primarily regulates licensed banks and financial groups.
Requirement: A banking license or a license as a specific type of financial institution would be required, which ...
Requirement: A banking license or a license as a specific type of financial institution would be required, which is highly stringent.
Investment/Profit-Sharing Tokens: Tokens that promise future profits, dividends, or a share in the project's succ...
Investment/Profit-Sharing Tokens: Tokens that promise future profits, dividends, or a share in the project's success, where the holder's primary expectation is financial gain derived from the efforts of the token issuer or a third party, would be classified as securities. This includes many tokens issued through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs).
AML/CFT: Secondary trading platforms and intermediaries would be subject to Panama's AML/CFT framework, notably ...
AML/CFT: Secondary trading platforms and intermediaries would be subject to Panama's AML/CFT framework, notably Law No. 23 of April 27, 2015, and subsequent amendments, which require customer due diligence (KYC), suspicious transaction reporting, and other compliance measures.
The SMV generally focuses its enforcement on traditional securities violations and fraudulent schemes.
The SMV generally focuses its enforcement on traditional securities violations and fraudulent schemes.
If a crypto offering were clearly fraudulent or violated securities laws, the SMV would typically issue cease-and-d...
If a crypto offering were clearly fraudulent or violated securities laws, the SMV would typically issue cease-and-desist orders, impose administrative fines, and potentially refer cases to prosecutorial authorities for criminal charges under the existing legal framework for securities fraud.
Superintendencia de Bancos de Panamá (SBP):
Superintendencia de Bancos de Panamá (SBP):
Superintendencia de Bancos de Panamá (SBP): While not directly issuing Travel Rule guidance, the SBP is the prima...
Superintendencia de Bancos de Panamá (SBP): While not directly issuing Travel Rule guidance, the SBP is the primary regulator for financial institutions and has issued some general warnings or guidance related to crypto activities.
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