March 28, 2025
Limitless Team
In recent years, Panama has emerged as a key point in Latin America for financial innovation, including the use and regulation of cryptocurrencies. With a neutral but progressive stance, the country seeks to position itself as a leader in the digital ecosystem. However, what does the Cryptocurrency Act mean for individuals and businesses? How will it affect key sectors such as banking and digital wallets? In this Limitless Legal guide, we'll break down everything you need to know about cryptocurrency regulation in Panama, its objectives, implications, and how to compare it to other jurisdictions such as El Salvador.
What does the Cryptocurrency Act seek to achieve in Panama?
Panama has not yet adopted cryptocurrencies as legal tender, but it is working to establish a legal framework that provides legal clarity in the use of cryptoassets. Key objectives include:
- Encourage the adoption of blockchain technology: This will serve to manage supply chains, notarial documents and more secure financial systems.
- Legalize the use of cryptoassets as a means of payment: Although its adoption will be optional, this offers flexibility for both users and companies.
- Regulate digital wallets and exchange platforms: These regulations are expected to comply with international standards such as those of the FATF to prevent money laundering.
The focus on Panama combines technological innovation with regulatory measures to boost its competitive capacity in the global arena.
Benefits and Challenges of Adopting Cryptoassets in Panama
Integrating a Cryptocurrency Act is not without clear benefits and significant challenges. Here we present both sides to you:
Benefits:
- Investment attraction: Fintech companies and global startups can find a favorable digital environment in Panama.
- Access to global markets: Trading with cryptoassets can facilitate international transactions, eliminating traditional banking barriers.
- Financial Inclusion: Digital wallets can allow unbanked populations to access financial services.
Challenges:
- Money Laundering Prevention: Panama needs to demonstrate that its financial regulation complies with international standards to prevent the evasion of FATF sanctions.
- User Education: Mass adoption depends on a strong educational campaign about the risks and benefits of cryptocurrency.
- Technological capacity: Ensure that blockchain platforms and networks are secure and ready to handle expanded adoption.
Key Differences Between Panama and El Salvador
Panama is often compared to El Salvador, the first country in the world to adopt Bitcoin as legal tender. However, there are fundamental differences between the two jurisdictions:
Optional vs. mandatory adoption:
While El Salvador demands to accept Bitcoin as a means of payment, the Panamanian Cryptocurrency Act states that its use will be optional, providing greater flexibility to both consumers and businesses.
Variety of cryptoassets:
Panamanian regulation includes not only Bitcoin, but also other cryptoassets, promoting diversity within the ecosystem.
Focus on digital infrastructure:
Panama intends to incorporate blockchain into its Digital Agenda, which expands its potential beyond the financial sphere.
The impact of blockchain and smart contracts in Panama
Blockchain technology is not only the basis for cryptocurrencies, it also offers multiple opportunities to transform key sectors in Panama:
- Smart contracts: Smart contracts automate legal and financial processes, reducing costs and intermediaries.
- Transparent finance: Blockchain allows financial transactions to be audited to prevent fraud and improve trust in the system.
- Health applications: From managing medical records to drug authentication, this sector will benefit greatly.
With a clear legal framework, Panama can attract developers and companies interested in implementing these revolutionary technologies.
The Future of Cryptoassets in Banking and Digital Payments
The banking sector in Panama has an enormous opportunity to adapt to the movement of cryptoassets. However, this change will bring with it some necessary adjustments:
Banking transformation:
The integration of cryptocurrency with traditional banking services can improve the speed and cost of international transactions. In addition, it will promote digital banking.
Proactive regulation:
Banking institutions will need to establish controls to mitigate risks, in line with FATF guidelines.
Accessible digital payments:
The regulation of digital wallets will allow for simpler, faster and cheaper payments, especially for small businesses.
In short, Panama has the capacity to become a regional model for the integration of banking and cryptoassets.
✍🏼 Take note...
The Cryptocurrency Law in Panama represents a significant effort to establish a regulatory framework that balances technological innovation with financial security. Panama seeks to position itself strategically in the global cryptoasset ecosystem through proactive regulations and blockchain technology. However, challenges such as the prevention of money laundering and bank adaptation need to be rigorously addressed. At Limitless Legal, we're here to help you understand and take advantage of these opportunities.