Is it possible to get a crypto license in Panama?

Panama is a country that is rapidly modernizing its financial legislation.

Today, Panama can be rightfully  called a promising jurisdiction for fintech businesses.

Among the examples of positive dynamics regarding the development of fintech and crypto is that the government of Panama provides such projects with tax incentives, and also supports blockchain technologies.

It is also important to note that a number of active Panamanian companies are already receiving payments in cryptocurrencies, as it is known from the media.

On the issue of regulation of crypto activities

It should be noted right away that the general dynamics and legislative trendsin Panama certainly indicate a predisposition to embracing crypto business, which cannot but rejoice.

On April 28, 2022, Panama legislators approved a draft of the bill to regulate bitcoin and 8 other cryptocurrencies, as well as their commercialization. This Latin American country, well-known as the center of offshore financial services, can become a new crypto hub – favorable conditions for doing business in the field of crypto assets are gradually attracting more and more companies, large and small.

The Panama Cryptography Law does not provide for the status of cryptocurrencies as of a legal tender, but allows mutual settlements of digital assets.

Without restrictions, you can use the following  cryptocurrencies in Panama:

• Bitcoin (BTC);
• Litecoin (LTC);
• XDC Network (XDC);
• Algorand (ALGO);
• Ripple (XRP);
• Ethereum (EHT);
• Elrond (EGLD);
• IOTA (MIOTA);
• Starbase (STAR).

The National Assembly of the state has already adopted the bill, it remains to wait for the signature of Laurentino Cortiso, President of Panama.

Unlike El Salvador, which formalized cryptocurrencies as legal tender in 2021, and the Central African Republic, the Panamanian authorities have expanded their legislation. Gabriel Silva, one of the initiators of the project, believes that the field of cryptography should not be limited to bitcoin and other coins. For example, digital works of art and other derivatives in blockchain technology require attention too.

The Panamanian crypto bill covers:

• issuance of digital securities;
• use and trading of cryptocurrencies;
• creation of new payment systems;
• tokenization of precious metals (transformation of property rights to an asset into a digital format), etc.
• everything that can be paid with bitcoin and other coins will become available to both ordinary people and commercial organizations.

Panama as innovation hub

Legislative innovations will enhance the financial inclusion of the country and attract companies working in the field of cryptography. Credit and financial institutions, individuals, legal entities will be able to carry out transactions with the above cryptocurrencies without restrictions, including payment of taxes.

The bill in question opens the door for public and private use of crypto assets, which, according to some experts, can nonetheless strengthen the negative offshore status of the country due to the lack of transparency of such operations. On the other hand, if crypto activities comply with the laws of the jurisdiction of registration of the company and international law, Panama can be an excellent option for asset diversification and the ability to legally reduce the tax burden.

What’s next?

The President of Panama, Laurentino Cartiso, has imposed a partial veto on a bill. The President argues that the document must necessarily comply with the FATF standards, which provide for “fiscal transparency and the prevention of money laundering.”

President Cartiso demanded that Law should be finalized in terms of compliance with the financial rules of the country.

Perhaps we will be able to see the Law signed by the President Laurentino Cartiso this autumn.

Although the law is being finalized at the initiative of the President, it is clear that The Panama Cryptography Law once again proves that the local authorities are not going to stop there, and in the near future, the jurisdiction can become a real crypto hub in Latin America.

Start your crypto business with SBSB

If you are interested in obtaining a cryptocurrency license in Panama, SBSB lawyers will help you register a company, and after the entry into force of the law on crypto regulation, we are ready to take over the licensing process, providing turnkey services.

SBSB specialists successfully launch crypto projects around the world with full legal support before and after obtaining a license.