**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. The constitutional principle of 'monetary freedom' (Article 262) allows parties to agree on any currency for payment, providing a legal basis for the unregulated use of cryptocurrencies.

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 and establish a licensing regime for Virtual Asset Service Providers (VASPs). 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, and crypto businesses face significant banking access challenges.

In summary, retail trading of cryptocurrencies in Panama is allowed in practice, as there are no explicit prohibitions and the constitution provides for monetary freedom. 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.'
*   **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):** '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.')
*   **Constitution of Panama (Article 262):** 'There is no forced tender currency in the Republic.'
*   **LegalNodes Article (2025-10-29):** 'The latest legislative initiative — Bill No. 247, introduced in 2025 — seeks to address Panama's current lack of a comprehensive legal framework... However, the bill is still under discussion.'

**4. Direct, Accessible URL Links to Specific Sources:**

*   **Chambers and Partners (2025-03-25):** https://chambers.com/content/item/13091
*   **Superintendencia de Bancos de Panamá (2018-04-24):** https://www.superbancos.gob.pa/es/aviso-al-publico/aviso-al-publico
*   **Superintendencia del Mercado de Valores (2018-04-25 & 2021-03-19):** https://supervalores.gob.pa/advertencia-sobre-criptomonedas-y-icos/
*   **Elliptic (2022-09-29):** https://www.elliptic.co/resources/country-guide-panama
*   **La Estrella de Panamá (2025-05-18):** https://www.laestrella.com.pa/opinion/columnistas/220518/criptomonedas-panama-vuelta-debate
*   **Constitution of Panama:** https://pdba.georgetown.edu/Constitutions/Panama/panama1972.html
*   **LegalNodes Article (2025-10-29):** https://legalnodes.com/article/panama-crypto-regulations