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Panama

Retail_Trading_Status

Allowed-Unregulated Unknown
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Status Changed

Previous status: Allowed-UnRegulated

Okay, as a specialized financial regulatory analyst, I will provide a detailed analysis of the changes between the "Previous Analysis" (dated April 12, 2025) and the "New Analysis" (dated June 26, 2025) regarding the Retail_Trading_Status in Panama. **Overall Summary of Changes:** The core status of retail cryptocurrency trading in Panama remains **`Allowed-Unregulated`** in both reports. However, the "New Analysis" provides updates on legislative efforts, introduces new specific developments (like the Municipality of Panama's tax payment initiative), offers slightly more definitive language on the applicability of general AML/KYC laws, and relies on more recent source information reflecting developments between mid-April and late June 2025. **Detailed Breakdown of Changes:** 1. **Current/Identified Status:** * **Previous Analysis:** `Allowed-UnRegulated` * **New Analysis:** `Allowed-Unregulated` * **Change:** **No change.** Both analyses concur on the fundamental status. 2. **Legislative Efforts (Primary Area of Change):** * **Previous Analysis (April 12, 2025):** * Detailed the history of Bill No. 697 (passed April 2022, vetoed June 2022, overridden Oct 2022, declared unconstitutional July 2023). * Highlighted a *new* draft bill emerging in *late March 2025*. This bill reportedly aimed to recognize crypto as voluntary payment, license VASPs (registration with UAF), enforce KYC/AML, and promote blockchain in public administration. It was noted as "under review and *has not been enacted*." * **New Analysis (June 26, 2025):** * Also recounts the history of Bill No. 697 and its unconstitutionality. * Identifies a *newer* legislative effort: **Bill No. 247**, introduced in the National Assembly in *May 2025* by Substitute Deputy Gabriel Solís, "again aiming to legally permit the use of crypto assets." * **Change Analysis:** * The "New Analysis" updates the information on ongoing legislative efforts. The "new draft bill" from March 2025 mentioned in the previous report seems to have either evolved into, or been superseded by, the more specifically identified **Bill No. 247** introduced in May 2025. * The previous report provided more specific details about the *content* of the March 2025 draft (VASP licensing, UAF registration). The new report is less specific about the content of Bill No. 247 beyond its general aim to "permit the use of crypto assets." This might be due to the early stage of Bill 247 or the information available to the analyst at the time. 3. **Regulatory Stance (SBP and SMV):** * **Previous Analysis:** Stated SBP and SMV opinions from 2018 that crypto is outside their competence, not legal currency/securities. * **New Analysis:** Reiterates the SBP and SMV stance (crypto not legal tender/securities, outside direct competence). Specifically mentions an SBP public notice (April 2018) and SMV warnings. * **Change Analysis:** **Minor refinement/additional detail.** The core message from regulators remains consistent across both reports. The new report might cite slightly more specific communications (e.g., "public notice") but the substance is unchanged. 4. **AML/KYC Requirements:** * **Previous Analysis:** Noted that general financial laws (AML/KYC) *may* apply, creating a "complex and uncertain landscape." It presented contrasting views: some sources suggesting no specific crypto AML/KYC, others recommending internal policies. Mentioned SBP expects due diligence from regulated FIs. * **New Analysis:** States more assertively that "general laws, particularly those related to AML and Know Your Customer (KYC) obligations, *are considered applicable* to businesses involved in cryptocurrency transactions, especially if they handle fiat currency." It specifically cites **Law 23 of 2015** (money laundering prevention) in this context. Operators are "advised to implement compliance measures." * **Change Analysis:** **Shift towards greater certainty.** The new analysis is more definitive about the applicability of existing general AML/KYC laws (specifically Law 23 of 2015) to crypto activities, whereas the previous report highlighted more ambiguity and contrasting opinions. 5. **Other Notable Developments:** * **Previous Analysis:** Mentioned Panama's territorial tax system as attractive for international crypto traders. No specific new initiatives mentioned beyond the March 2025 draft bill. * **New Analysis:** Introduces a new development: "reports in early 2025 of the **Municipality of Panama announcing its intention to accept cryptocurrency payments for taxes**, with a local bank acting as an intermediary to convert the crypto to US dollars." * **Change Analysis:** **Significant new information.** The municipal tax payment initiative is a concrete development not present in the previous report, indicating practical steps towards crypto adoption at a local government level, even without overarching national regulation. 6. **Source Material and Recency:** * **Previous Analysis:** Dated April 12, 2025. Sources cited were generally up to late March 2025 (e.g., Digital Watch Observatory, Mar 30, 2025, regarding the draft bill). * **New Analysis:** Dated June 26, 2025. Cites more recent sources, including information from May 2025 (e.g., La Estrella de Panamá, 2025-05-18, regarding Bill No. 247) and June 2025 (e.g., Expat-Tations, 2025-06-11). It also includes direct links to sources. * **Change Analysis:** The new analysis is based on more current information, reflecting developments that occurred between mid-April and late June 2025. The inclusion of direct, accessible URLs is also a practical improvement in sourcing. 7. **Narrative Structure and Emphasis:** * Both reports follow a similar structure (Status, Narrative, Excerpts, Sources). * The previous report placed significant emphasis on the detailed legislative journey and failure of Bill 697, and the then-emerging March 2025 draft bill. * The new report, while still covering Bill 697's history, shifts some focus to the newer Bill No. 247 and the practical development of the municipal tax initiative. * **Change Analysis:** The emphasis naturally shifts to the most recent developments. **Conclusion of Changes:** The period between April 12, 2025, and June 26, 2025, saw continued activity in Panama's crypto space, despite the overarching regulatory status remaining `Allowed-Unregulated`. Key changes reflected in the new analysis are: * **Updated Legislative Initiative:** The general "new draft bill" of March 2025 (previous report) has been identified as the more specific **Bill No. 247** introduced in May 2025 (new report). * **New Practical Development:** The **Municipality of Panama's reported plan to accept crypto for taxes** is a significant new piece of information. * **Clarified AML/KYC Stance:** The new analysis provides a more assertive interpretation that existing general AML/KYC laws (notably Law 23 of 2015) are applicable, reducing the ambiguity highlighted previously. * **Enhanced Recency:** The new analysis incorporates more up-to-date information and sources. The landscape remains dynamic, with ongoing legislative attempts and practical explorations of crypto use, even in the absence of a comprehensive, crypto-specific regulatory framework.

Analysis ID
#427
Version
Latest
Created
2025-06-26 13:03
Workflow Stage
Live

Executive Summary

In Panama, individuals are legally allowed to buy, sell, and hold cryptocurrencies, but a comprehensive regulatory framework is lacking. The Superintendency of Banks of Panama (SBP) and the Superintendency of the Securities Market (SMV) do not consider cryptocurrencies as legal tender, securities, or financial instruments under existing laws. While specific crypto regulations are absent, general AML/KYC laws apply to businesses involved in cryptocurrency transactions. Legislative efforts to create a regulatory framework, such as Bill No. 697, have faced setbacks, and a new effort, Bill No. 247, is underway, indicating an evolving landscape.

Key Pillars

The primary regulators are the Superintendency of Banks of Panama (SBP) and the Superintendency of the Securities Market (SMV), although they do not directly oversee cryptocurrencies under current laws. Core compliance requirements for businesses involved in cryptocurrency transactions include adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, particularly Law 23 of 2015. There are currently no specific licensing or registration requirements for cryptocurrency businesses due to the absence of a dedicated regulatory framework.

Landmark Laws

Law 23 of 2015: Addresses money laundering prevention and is applicable to businesses involved in cryptocurrency transactions.
Bill No. 697 (April 2022): Aimed to regulate the use and commercialization of crypto assets but was partially vetoed in June 2022 and later declared unconstitutional in July 2023 due to procedural issues.
Bill No. 247 (May 2025): A new legislative effort to legally permit the use of crypto assets.

Considerations

Cryptocurrencies are not considered legal tender, securities, or financial instruments by Panamanian financial regulators (SBP and SMV). There are no specific tax regulations for cryptocurrencies mentioned in the report. The Superintendencia del Mercado de Valores (SMV) has warned the public about the risks associated with cryptocurrencies, noting the lack of supervision or oversight from a financial regulatory entity. The absence of specific regulations means that consumer protection in the crypto space is not as robust as in traditional financial markets. Municipality of Panama announced intention to accept cryptocurrency payments for taxes in early 2025, with a local bank acting as intermediary to convert crypto to US dollars.

Notes

In April 2018, the SBP issued a public notice clarifying that activities related to cryptocurrencies are not under its purview. The SMV issued public notices and opinions stating they do not supervise cryptocurrencies in general. Bill No. 697, passed in April 2022, was intended to allow the use of cryptocurrencies as a means of payment but was later vetoed and declared unconstitutional. Bill No. 247 was introduced in May 2025 as a new legislative effort. There are reports in early 2025 of the Municipality of Panama announcing its intention to accept cryptocurrency payments for taxes.

Detailed Explanation

As of June 2025, individual citizens and residents in Panama are legally permitted to buy, sell, and hold cryptocurrencies; however, the activity remains largely unregulated. Panama lacks a specific, comprehensive regulatory framework for cryptocurrencies and related activities, meaning it operates outside the direct oversight of dedicated crypto-specific legislation. The Superintendency of Banks of Panama (SBP) and the Superintendency of the Securities Market (SMV) have stated that cryptocurrencies are not considered legal tender, securities, or financial instruments under current laws. In April 2018, the SBP issued a public notice warning about the risks associated with cryptocurrencies and clarifying that such instruments are not specifically regulated and activities related to them are not under the SBP's purview. The SMV has indicated that cryptocurrencies are not considered "securities" and has also warned the public about the associated risks.

Despite the absence of specific crypto regulations, general laws, particularly those related to Anti-Money Laundering (AML) and Know Your Customer (KYC) obligations, are considered applicable to businesses involved in cryptocurrency transactions, especially if they handle fiat currency. Law 23 of 2015, which addresses money laundering prevention, is often cited in this context. Operators of platforms where cryptocurrencies are traded or stored are advised to implement compliance measures based on local AML/KYC regulations to prevent illicit use.

There have been legislative efforts to create a regulatory framework. Bill No. 697, aimed at regulating the use and commercialization of crypto assets, was passed by the National Assembly in April 2022. The bill sought to provide legal certainty, allow the use of cryptocurrencies as a means of payment (though not as mandatory legal tender), and regulate aspects like digital asset issuance and exchanges. However, the President partially vetoed the bill in June 2022, citing concerns about compliance with Financial Action Task Force (FATF) recommendations and the need for stricter AML measures. The bill was sent back to the National Assembly for further discussion and was later declared unconstitutional by the Supreme Court of Justice in July 2023 due to procedural issues in its approval process after the veto.

More recently, in May 2025, a new legislative effort, Bill No. 247, was introduced in the National Assembly, again aiming to legally permit the use of crypto assets. There are also reports in early 2025 of the Municipality of Panama announcing its intention to accept cryptocurrency payments for taxes, with a local bank acting as an intermediary to convert the crypto to US dollars. These developments indicate an ongoing interest and a generally permissive, albeit unregulated, environment for retail cryptocurrency trading. The lack of specific regulation means that consumer protection in the crypto space is not as robust as in traditional financial markets. The regulatory landscape is evolving, with past and present legislative efforts indicating a move towards establishing a clearer framework, but as of mid-2025, this is yet to be definitively implemented.

Summary Points

Retail Trading of Cryptocurrencies in Panama: Regulatory Status (June 2025)

I. General Regulatory Status:

  • Allowed-Unregulated: Retail trading of cryptocurrencies (buying, selling, and holding) is permitted in Panama. However, there is no specific, comprehensive regulatory framework dedicated to cryptocurrencies.
  • Not Legal Tender: Cryptocurrencies are not considered legal tender in Panama.
  • Not Securities: Cryptocurrencies are not classified as securities or financial instruments under existing Panamanian laws.
  • Regulatory Gap: Cryptocurrency operations exist in a legal grey area due to the lack of specific regulations.

II. Key Regulatory Bodies & Their Roles:

  • Superintendency of Banks of Panama (SBP):
    • Does not consider cryptocurrencies to be within its direct supervisory competence.
    • Issued public warnings about the risks associated with cryptocurrencies (April 2018).
  • Superintendency of the Securities Market (SMV):
    • Does not consider cryptocurrencies as "securities."
    • Issued public warnings about the risks associated with cryptocurrencies.
  • Role of Regulatory Bodies: While these bodies oversee traditional economic activities, they do not have direct authority over cryptocurrency transactions or businesses.

III. Important Legislation & Regulations:

  • Lack of Specific Crypto Legislation: Panama lacks a comprehensive regulatory framework specifically tailored to cryptocurrency.
  • Applicability of General Laws: General laws, particularly those related to Anti-Money Laundering (AML) and Know Your Customer (KYC), are applicable to businesses involved in cryptocurrency transactions, especially those handling fiat currency.
  • Law 23 of 2015: Addresses money laundering prevention and is often cited in the context of AML/KYC compliance for crypto businesses.

IV. Compliance Requirements:

  • AML/KYC Compliance: Operators of platforms where cryptocurrencies are traded or stored are advised to implement AML/KYC compliance measures.
  • Due Diligence: Platforms should conduct due diligence on users to prevent misuse of their services.

V. Notable Restrictions or Limitations:

  • Lack of Consumer Protection: The absence of specific regulation means that consumer protection in the crypto space is not as robust as in traditional financial markets.
  • Regulatory Uncertainty: The legal grey area creates uncertainty for businesses and investors.

VI. Recent Developments & Changes:

  • Bill No. 697 (2022):
    • Aimed to regulate the use and commercialization of crypto assets.
    • Passed by the National Assembly in April 2022.
    • Partially vetoed by the President in June 2022 due to concerns about FATF compliance and AML measures.
    • Declared unconstitutional by the Supreme Court of Justice in July 2023 due to procedural issues.
  • Bill No. 247 (May 2025):
    • A new legislative effort introduced in the National Assembly.
    • Aims to legally permit the use of crypto assets.
  • Municipality of Panama (Early 2025):
    • Announced intention to accept cryptocurrency payments for taxes.
    • A local bank will act as an intermediary to convert crypto to US dollars.

VII. Summary:

  • Retail trading of cryptocurrencies is allowed in practice but largely unregulated.
  • Existing general financial laws (AML/KYC) are expected to be followed.
  • The regulatory landscape is evolving, with ongoing legislative efforts to establish a clearer framework.

Full Analysis Report

Report on the Current Status of Retail Trading in Panama

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Status:

Allowed-Unregulated

2. Detailed Narrative Explanation:

Individual citizens and residents in Panama are legally permitted to buy, sell, and hold cryptocurrencies. However, Panama currently lacks a specific, comprehensive regulatory framework for cryptocurrencies and related activities. This means that while the activity is not prohibited, it operates largely outside the direct oversight of dedicated crypto-specific legislation.

Historically, Panamanian financial regulators, such as the Superintendency of Banks of Panama (SBP) and the Superintendency of the Securities Market (SMV), have stated that cryptocurrencies are not considered legal tender, securities, or financial instruments under current laws, and therefore fall outside their direct supervisory competence. For instance, the SBP issued a public notice in April 2018, warning about the risks associated with cryptocurrencies like Bitcoin and clarifying that such instruments are not specifically regulated and activities related to them are not under the SBP's purview. Similarly, the SMV has indicated that cryptocurrencies are not considered "securities" and has also warned the public about the associated risks.

Despite the absence of specific crypto regulations, general laws, particularly those related to Anti-Money Laundering (AML) and Know Your Customer (KYC) obligations, are considered applicable to businesses involved in cryptocurrency transactions, especially if they handle fiat currency. Operators of platforms where cryptocurrencies are traded or stored are advised to implement compliance measures based on local AML/KYC regulations to prevent illicit use. Law 23 of 2015, which addresses money laundering prevention, is often cited in this context.

There have been legislative efforts to create a regulatory framework for cryptocurrencies. Bill No. 697, which aimed to regulate the use and commercialization of crypto assets, was passed by the National Assembly in April 2022. This bill sought to provide legal certainty, allow the use of cryptocurrencies as a means of payment (though not as mandatory legal tender), and regulate aspects like digital asset issuance and exchanges. However, the President partially vetoed the bill in June 2022, citing concerns about compliance with Financial Action Task Force (FATF) recommendations and the need for stricter AML measures. The bill was sent back to the National Assembly for further discussion and was later declared unconstitutional by the Supreme Court of Justice in July 2023 due to procedural issues in its approval process after the veto.

More recently, in May 2025, a new legislative effort, Bill No. 247, was introduced in the National Assembly, again aiming to legally permit the use of crypto assets. There are also reports in early 2025 of the Municipality of Panama announcing its intention to accept cryptocurrency payments for taxes, with a local bank acting as an intermediary to convert the crypto to US dollars. These developments indicate an ongoing interest and a generally permissive, albeit unregulated, environment for retail cryptocurrency trading.

Platforms for buying and selling cryptocurrencies operate in Panama, and individuals can use them. However, the lack of specific regulation means that consumer protection in the crypto space is not as robust as in traditional financial markets.

In summary, retail trading of cryptocurrencies in Panama is allowed in practice, as there are no explicit prohibitions. However, it remains largely unregulated by specific crypto-focused laws. Existing general financial laws, particularly concerning AML/KYC, are expected to be followed by entities involved in such activities. The regulatory landscape is evolving, with past and present legislative efforts indicating a move towards establishing a clearer framework, but as of mid-2025, this is yet to be definitively implemented.

3. Specific, Relevant Text Excerpts:

  • Chambers and Partners (2025-03-25): "Although cryptocurrencies, digital assets, and virtual currencies are not regulated in Panama, there are platforms where these assets are traded or stored. Operators of these platforms are advised to implement compliance measures, such as due diligence and KYC procedures based on local regulations, to prevent the misuse of their services before allowing any person to use their platforms."
  • Chambers and Partners (2025-03-25): "Currently, no law or regulation applies to virtual assets, cryptocurrencies or virtual currencies in Panama. In this context, both the SBP and the securities regulator (the Superintendencia del Mercado de Valores or SMV) have issued public notices and opinions (respectively) stating that they do not supervise cryptocurrencies in general. The securities regulator does not consider cryptocurrencies as “securities” because these are not encompassed within such definition in the Securities Law."
  • Expat-Tations (2025-06-11): "What is the current legal status of cryptocurrencies in Panama? Cryptocurrencies are considered legal in Panama, with the government working on a regulatory framework to oversee their use. The Crypto Law Bill of 2021 is a significant step towards creating a clear legal environment for digital assets." (Note: This refers to the Bill that was later vetoed and declared unconstitutional, highlighting the ongoing but not yet finalized process).
  • Pardini & Asociados (2024-10-09): "Today, Panama lacks a comprehensive regulatory framework specifically tailored to cryptocurrency. While financial regulators such as the Superintendency of Banks and the Superintendency of the Securities Market oversee traditional economic activities, these bodies do not have direct authority over cryptocurrency transactions or businesses. This regulatory gap has left many aspects of cryptocurrency operations in a legal grey area, where existing laws may or may not apply."
  • Pardini & Asociados (2024-10-09): "Although there is no specific crypto regulation, any company engaging in cryptocurrency exchanges or offering wallet services may still be subject to Panama's stringent AML/KYC requirements."
  • Superintendencia de Bancos de Panamá (2018-04-24): "Entendiendo que es un tema relativamente nuevo, advertimos que, la actividad de intercambio, inversión, compraventa y comercialización en general de “Bitcoin” o de cualquier otro instrumento de igual categoría, no tiene una regulación específica. En ese sentido, debemos aclarar que las actividades que se desarrollen a través de éste u otro instrumento de esa categoría no caen dentro de la competencia de esta Superintendencia." (Translation: "Understanding that this is a relatively new topic, we warn that the activity of exchange, investment, buying and selling, and commercialization in general of 'Bitcoin' or any other instrument of the same category, does not have specific regulation. In this sense, we must clarify that the activities carried out through this or another instrument of that category do not fall within the competence of this Superintendency.")
  • Superintendencia del Mercado de Valores (2018-04-25): "La SMV alerta al público inversionista ser prudente y conocer los riesgos asociados a este tipo de inversión, debido a que: i). No cuentan con un marco legal, por ende no se encuentran bajo ninguna supervisión o fiscalización de un ente regulador financiero en la República de Panamá." (Translation: "The SMV alerts the investing public to be prudent and aware of the risks associated with this type of investment, because: i). They do not have a legal framework, therefore they are not under any supervision or oversight of a financial regulatory entity in the Republic of Panama.")
  • Elliptic (2022-09-29, referring to the then-current status which largely persists): "At the time of writing, the Panamanian regulatory framework does not regulate any type of cryptoasset, nor mining, trading, management, custody or any other related activities. Furthermore, Panamanian regulators do not recognize cryptoassets as either currency, financial instruments or securities."
  • La Estrella de Panamá (2025-05-18): "Nuevamente, la Asamblea Nacional a través del Proyecto de Ley No. 247 presentado por el Diputado Suplente Gabriel Solís, pretende realizar un segundo esfuerzo para permitir el uso de criptoactivos de forma legal en nuestro país." (Translation: "Again, the National Assembly, through Bill No. 247 presented by Substitute Deputy Gabriel Solís, intends to make a second effort to allow the legal use of crypto assets in our country.")

4. Direct, Accessible URL Links to Specific Sources:

Web Sources (23)

Sources discovered via web search grounding

Search queries used (10)
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  • Superintendency of Banks of Panama cryptocurrency statement 2024 2025
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