Home NFTs Panama Pulls Back On Legalizing Crypto, President Wants Compliance With AML Laws

Panama Pulls Back On Legalizing Crypto, President Wants Compliance With AML Laws

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Panama has decided to postpone the legalization of digital assets. According to multiple sources, Panamanian President Laurentino Cortizo has stated that he will not sign the crypto bill. The president stated in the statement that the only way for a reversal to occur is for the crypto bill to include measures that will prevent money laundering in the sector. This move has exchanges and people scrambling to get into the market as soon as the bill is approved.

Panama Postpones Crypto Legalization

Panama declared a few months ago that it would increase its efforts to verify that all exchanges and digital assets in the nation were regulated.

The bill, however, will need the president’s signature to become law, something he is unwilling to provide. The president believes it is critical to our anti-money laundering laws, given the country’s recent increase in such cases.

Other money laundering offenses have also been reported in the crypto industry, which is one of the reasons why the president has refused to sign the measure. Panama has been added to the FATF’s list of nations with lax anti-money laundering measures due to the lack of restrictions. The president, on the other hand, stated that his administration is now researching the types of laws that might be effective and will submit recommendations to the body.

President Laurentino Cortizo of Panama has said that he will not sign a law governing crypto use unless it includes stricter anti-money laundering provisions.However, before the bill can become law, it must be signed by the president, and Cortizo is not yet pleased with the bill’s conformity with anti-money laundering regulations.

“If I’m going to answer you right now with the information that I have, which is not enough, I will not sign that law,” the president said at the Bloomberg New Economy Gateway Latin America conference. Cortiza went on to say that he and his country take money laundering very seriously.

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BTC/USD slides below $30k. Source: TradingView

While Cortizo believes the crypto law is “innovative,” he revealed waiting for global regulation of the asset class.

“It is an innovative law from what I have heard, it’s a good law. However, we do have a solid financial system here in Panama and one of the things I’m waiting on is when you have a global regulation of crypto-assets.”

This may be due to Panama’s inclusion on the Financial Action Task Force’s list of countries with “jurisdictions with strategic deficiencies” in the fight against money laundering. Cortizo is sticking to his promise to implement the task force’s recommendations and tighten controls on dirty money by refusing to sign.

Cortizo is undoubtedly also aware that Panama’s dollarized economy and well-developed financial services sector make it a target for drug traffickers and drug cartels in neighboring Colombia and Mexico.

Cortizo said he would consider sanctioning some portions of the law while vetoing others, but he’s waiting for legal opinion from his legal staff.

Related reading | Congressman Presents Crypto Law Project In Panama. What Does It Say, Exactly?

New Update Leaves Exchanges Uncertain

This rule is important to the government since it will give leverage for anyone moving money abroad using cryptocurrency. There is widespread agreement that cryptocurrency has the potential to improve the country’s financial system. Banks will adopt digital assets as well, giving custodian services to the unbanked who will be unable to use wallets and other such services. Although MPs feel that embracing cryptocurrency will benefit the country, others are concerned about the industry’s restrictions.

Exchanges have been eager to begin operations in the country since the assembly passed the crypto bill a few weeks ago. Deribit is preparing to launch its derivatives services in the country after spending a significant amount of time working on its KYC regulations.

The current state of affairs makes a commencement date in the country doubtful. The popularity of cryptocurrency and NFTs continues to rise in Panama. Traders are still putting money in their pockets despite the market collapse. In the near years, the country is also seriously contemplating adopting blockchain technology.

Related reading | Panama Follows El Salvador as it Plans to Adopt Bitcoin and other crypto like XDC Network as Legal Tender

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