In April, the Panamanian National Assembly decisively approved a plan to regulate digital currencies. However, the bill’s passage into law has been blocked by Panamanian President Laurentino Cortizo.
Cortizo, whose signature is required for the law to move forward, stated that he would not sign it unless he had certain confirmations. He commented on a recent Bloomberg event.
He informed the panel that he does not have adequate knowledge regarding the measure right now. But his main worry is that it adheres to worldwide anti-money laundering standards.
His approach aligns with his promise to alter Panama’s status as a refuge for money laundering. The Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, has recommended that Cortizo adopt the suggestions. The FATF presently considers Panama a “jurisdiction with strategic shortcomings.”
The president also stated that his legal staff is evaluating the bill and that he would follow their advice in sanctioning or vetoing portions of it. He also stated that Panama has a solid financial system and that the country is not in a rush to accept digital currencies.
How will the introduction of digital currencies benefit Panama?
Last September, the bill was first submitted to the Panamanian legislature. The bill was passed with a 40-0 vote by the representative in April. The law now includes digital asset trade and usage, digital securities, new payment methods, and the tokenization of precious metals.
Panamanians will be able to utilize digital assets as payment for civil or commercial transactions that are not forbidden by Panamanian law. It also allows the government to retain records using blockchain technology.
Despite concerns that adopting digital currencies could exacerbate issues about money laundering in Panama, experts have pointed out that the country stands to profit greatly from the decision.