In addition to loyal taxation and support of blockchain technology at the official level, the country actively supports cryptocurrency startups – more than 30 companies already receive payments in non-fiat money. The Panamanian authorities are developing a ten-year state project for the upgrade of the financial system, within the frames of which, the stock exchanges and firms engaged in the purchase and sale and exchange of cryptocurrencies receive legal status. The relevant bill, which regulates the legal status of cryptocurrencies, and also provides benefits for the industry, was introduced in 2021.
Expected improvements
Businessmen who worry about the long view may have a question of whether it makes sense to invest in the jurisdiction now. The position of local government authorities regarding cryptocurrencies is clearly in favor of the crypto business. The bill, introduced in 2021, aims to create thousands of jobs, new sources of investment, and more transparent regulation in the industry. In particular, it would extend recognition of crypto assets, including Bitcoin, as alternative global means of payment in the framework of any civil or commercial transactions that are not prohibited by the legislative system of the Republic of Panama. Such operations are considered low-cost.
Market operators are required to have the following elements of activity:
- notifications about the start of work;
- commercial license;
- registration in the Public Register;
- posting information on the site regarding the commercial name of the company, the address of its physical office, the domain name(s), email addresses for contacts, terms of use of the site, privacy policy.
The operating company, inter alia, is obliged to:
- inform about the goals of their business activities;
- collect from customers information required by law on the nature of their professional or commercial activities;
- develop procedures for checking the activities carried out by customers;
- provide information on the high-risk nature of transactions and the technical characteristics of the assets;
- notify legally authorized bodies of suspicious transactions cases.
Current regulation of crypto activities
The supervisory and regulatory authority of the country, the General Directorate of Banks, obliges entrepreneurs to notify investors and users of the risks associated with the blockchain and crypto-instruments, and calls for taking “due diligence measures”.
As part of the financial system of Panama updating, the regulator allocates issuers and providers of crypto-wallets, exchangers, exchanges, and similar organizations in the SFI (specialized financial institutions) category and obliges them to obtain a cryptocurrency exchange license in Panama. SFIs will be treated as legal entities and will be able to develop their internal methods and rules for the provision of exchange services in non-fiat money. It should be guided by the Panamian and international rules and principles of assets and data protection.
Licensing Terms
To get a cryptocurrency exchange license in Panama, an entrepreneur must register a Panamian legal entity with an activity included in the SFI category. The first three years the firm submits to the Ministry of Economics, then passes under the authority of the main regulator. He will charge duties (up to 200 thousand US dollars) and mandatory fees.
To get a cryptocurrency exchange license in Panama and carry out activities with them, you need to submit the regulator with the following documents:
- business principles description, general business plan, and a list of services provided;
- a business plan for the first three years of work;
- SFI social contract (draft);
- copies of personal identification and resumes of SFI-business owners, directors, and officials;
- certificates of conviction of individuals associated with the company;
- technical equipment report;
- account statement at the bank, confirming that the business has enough funds to work under a license to exchange cryptocurrency;
- documentation of the control procedures for the AML / KYC requirements implementation, including internal policies regarding the monitoring and control of operations;
- receipt of state services payment.
“Prifinance” experts will help to simplify and accelerate the obtaining of permits. We will undertake the legal, organizational, and technical side of the issue and help to deploy the business with the minimum time and effort expenditures.
A new bill in Panama aims to recognize Bitcoin as an alternative payment method and enable freedom to use crypto.
Amid Bitcoin (BTC) becoming legal tender in El Salvador, another country in Central America is progressing on its way to enable freedom to use cryptocurrencies like BTC and Ether (ETH).
On Monday, the Republic of Panama introduced a bill on regulating cryptocurrencies, aiming to make the country “compatible with the blockchain, crypto assets and the internet.”
Announcing the news on Twitter, Panamanian pro-crypto congressman Gabriel Silva stressed that the new legal initiative has the potential to generate thousands of jobs, create new investment sources, as well as make the government “more transparent.”
According to the draft bill document shared by Silva, the new legislation intends to recognize crypto assets like Bitcoin as an alternative global payment method for “any civil or commercial operation not prohibited by the legal system of the Republic of Panama.” The bill authors emphasized that cryptocurrencies enable fast and low-cost payments allowing them to finalize a financial transaction “regardless of the distance between parties and the transaction volume.”
In contrast to the government of El Salvador, which has required local businesses to accept Bitcoin in exchange for goods or services alongside the United States dollar, Panama’s new crypto bill does not intend to force obligatory Bitcoin acceptance. Instead, the legislation calls to establish freedom to use cryptocurrencies like Bitcoin and Ether in Panama, local TV network Telemetro reported.
Related: Latin lawmakers don lazer eyes on Twitter in support of Bitcoin
Silva said that the new draft bill was prepared in collaboration with Panamanian citizens and a multidisciplinary team, including industry and technology experts. The legislation was created taking into consideration important guidelines provided by international organizations such as the Financial Action Task Force, he noted.
Amid El Salvador deciding to accept Bitcoin as an official currency, more countries in Central America have been moving into the crypto industry. In late August, a company in Honduras reportedly installed the country’s first Bitcoin ATM, allowing users to buy BTC and ETH using the local fiat currency, lempira.
