President of Panama Rejects to Sign the Crypto Bill, Sends it Back for Further Discussion Over “AML-related” Concerns
The most pressing concern that the President had was the lack of Anti-Money laundering provisions in the Bill.
- Panama’s President Laurentino Cortizo vetoed the crypto bill due to a lack of robust anti-money laundering provisions.
- President Cortizo previously called the crypto bill “innovative law.”
- Once signed by the President, it will enable local businesses to accept payments in digital currencies, legally recognize DAOs, and create a framework for the government to use blockchain technology for record-keeping.
Recently, a Panamanian media outlet, La Prenda, reported that Bill №697, informally known as the “Crypto Bill,” was vetoed by Panama’s President Laurentino Cortizo.
The President said that the proposed bills need further improvements to meet the standards of Panama’s banking regulations. The most pressing concern that the President had was the lack of Anti-Money laundering provisions in the Bill.
In May 2022, while giving a speech during a Bloomberg event, President Cortizo was very upfront about his view that he wouldn’t sign the bill if it failed to incorporate FATF’s AML regulations.
That said, President Cortizo hasn’t rejected the bill in its entirety, as he appreciated specific segments of the bill. In fact, previously, he has also called the bill an “innovative law.” But he demanded strong measures to prevent the illicit use of digital assets.
President Cortizo is heavily stressing the need for a robust AML mechanism because the country has been campaigning to improve its reputation among global financial regulators, which has been dented due to its popularity as a tax haven. For instance, the Financial Task Force (FATF) categorized Panama under the “Jurisdictions Under Increased Monitoring.”
Gabriel Silva, a Panamanian Congressman who played a vital role in introducing the said Bill, wasn’t enthused about the President’s vetoing the bill. He tweeted that the President’s decision to reject the bill resulted in “a lost opportunity to generate jobs, attract investment and incorporate technology and innovation in the public sector.”
He further stated that Congress would make further changes to the bill after going through the Veto and then re-submit it to the President for consideration.
What the Bill has to Offer?
If the bill comes into force, it will enable local businesses to accept payments in digital currencies of all sorts. Thus, Panama’s crypto adoption will be different from El Salvador, which has only legalized the use of Bitcoin as a means of payment in the country by approving it as a legal tender.
Besides, the Bill will also pave the way for using blockchain technology for government record-keeping purposes and give legal recognition to the Decentralized Autonomous Organizations (DAOs).
Considering the pseudo-anonymous nature of crypto transactions, countries worldwide are tightening their AML-related rules to prevent its use by sanctioned individuals and entities. The first such global push for the digital assets space came in the form of FATF’s Travel Rule.
Although not all countries have started enforcing the FATF’s Travel Rule yet, sooner or later, they all will. Thus, all Virtual Asset Service Providers (VASPs) will have to begin complying with the Travel Rule.
The first thing that a VASP will need to start complying with the Travel Rule is a Travel Rule Solution Provider (TRSP). And Veriscope is second to none when it comes to TRSPs. Check it out here: https://www.veriscope.network/ and reach out to our BizDev team here: https://www.veriscope.network/contact for a discussion.