In April, the National Assembly of Panama voted overwhelmingly in favor of a bill to regulate digital currencies. However, the bill’s passage into law has been halted by Panama’s President Laurentino Cortizo.
Cortizo, whose signature is needed for the bill to progress, said he would not sign it without getting certain confirmations first. He made the statement while speaking at a recent Bloomberg event.
He told the panel that, at the moment, he does not have enough information about the bill. But his primary concern is ensuring that it complies with global anti-money laundering standards.
“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. I have to be very careful if the law has clauses related to money laundering activities. Anti-money laundering activities are very important to us,” Cortizo said.
His stance is notably in keeping with his pledge to change Panama’s reputation as a money laundering haven. Cortizo has been implementing recommendations made by the Financial Action Task Force (FATF)—the global money laundering and terrorist financing watchdog, which currently considers Panama a “jurisdiction with strategic deficiencies.”
The president also revealed that his legal team is reviewing the law, and he will follow their recommendation to sanction or veto parts of it. He added that Panama has a strong financial system and is not in a hurry to adopt digital currencies.
How Panama stands to benefit from digital currency adoption
The bill was first introduced to the Panamanian parliament last September. In April, the representative voted 40-0 in favor of passing the law. In its current form, the bill covers the trading and use of digital assets, issuance of digital securities, new payment systems, and the tokenization of precious metals.
Under the new legislation, Panamanians may use digital assets as payment for civil or commercial operation that are not prohibited by law in the country. It also allows the government to use blockchain technology to keep its records.
Despite fears that Panama may deepen concerns about money laundering in its territory by adopting digital currencies, the country still stands to get a lot of benefits from the move, as experts have pointed out.
A few of these include that adopting digital currencies like Bitcoin will help Panama shield itself from some of the disadvantages of being a dollarized country. These include the U.S.’s use of the dollar as a political weapon and the debasement of the dollar.
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