Panama

As of December 2025, the regulatory status of cryptocurrency in Panama is best classified as a 'Gray-Zone.' This designation stems from the absence of a finalized legal framework despite active legislative attempts and a vibrant, albeit unregulated, market. The primary governing principle remains the country's constitutional 'monetary freedom,' which permits the use of any currency agreed upon by parties. This allows retail trading and the operation of exchanges to proceed legally, but without the protections or clarity of a formal licensing regime.

The regulatory landscape was significantly shaped by the failure of Bill No. 697. Originally passed by the National Assembly in April 2022, the bill sought to make Panama a crypto hub by regulating use, taxation, and DAO operations. However, President Laurentino Cortizo partially vetoed the bill in June 2022, citing Anti-Money Laundering (AML) concerns. The saga concluded in mid-2023 when the Supreme Court of Justice declared the bill unconstitutional, ruling that it violated separation of powers by imposing administrative duties on the executive branch without proper coordination. This ruling effectively reset the regulatory clock to zero.

In response to the legislative void and international pressure from the Financial Action Task Force (FATF), a new proposal, Bill No. 247, was introduced in 2025. This draft legislation aims to correct the constitutional flaws of its predecessor while establishing a clear licensing framework for Virtual Asset Service Providers (VASPs) under the Financial Analysis Unit (UAF). It proposes mandatory AML/KYC protocols and defines crypto assets' legal standing. However, as of late 2025, this bill remains in the legislative process and has not yet been enacted, leaving the sector in a continued state of limbo.

Operationally, this 'Gray-Zone' status presents a mixed environment for retail traders and businesses. While individuals can freely buy, sell, and hold assets, local crypto businesses struggle with basic infrastructure, particularly banking. The Superintendency of Banks of Panama (SBP) has maintained a cautious stance, issuing circulars that warn of risks and clarifying that crypto is not legal tender. Consequently, many local banks refuse to open accounts for crypto-related entities, forcing them to rely on offshore banking or peer-to-peer settlement networks. Until Bill 247 is passed and implemented, Panama remains a jurisdiction of high potential but significant regulatory uncertainty.