President Laurentino Cortizo of Panama recently stated that he will not sign a new crypto-friendly bill passed by the legislature last month. According to sources, the President wants to guarantee that cryptocurrencies follow internationally established anti-money laundering (AML) guidelines.
The Panamanian parliament enacted a new bill last month that would allow crypto exchanges to obtain licenses to operate legally in the country. After the bill unanimously passed the legislature, Panama’s president stated that he would not sign it. Only if the bill has tighter anti-money laundering protocols that are comparable to internationally recognized levels will President Obama sign it.
President Cortizo further stated that anti-money laundering efforts are critical to the Panamanian government.
Panama is now on the Finance Action Task Force’s watch list. This is due to loose banking and tax policies that encourage dirty money. According to reports, Panama’s dollarized economy makes it a target for drug trafficking and money laundering in neighboring countries. To eliminate illicit money, the President wants to ensure that proper AML processes implement.
Crypto-Friendly, but Money Laundering Risk
The use of Bitcoin and a few other cryptos for private transactions and tax payments permits by parliament. This law covers a broader range of topics, such as cryptocurrency trading, issuance, new payment options, and the tokenization of precious metals. Crypto assets can use by all Panamanians to pay for legal transactions.
Panama has long regarded as a tax haven for many rich, as well as a target for money laundering and terrorism financing. In fact, after the bill passed, some financial experts and counselors warned that the action would certainly worsen Panama’s situation.
Romain Dromard is the CEO of K&B Family Office, a financial investment advising firm. Panama, he claimed, was already in a horrible situation. These means of payment avoid the due diligence procedures that foreign organizations are urging Panama to adopt.
This bill would also allow the government to convert its public records to immutable blockchain technology, according to reports. As a result, the country will become a digital hub. The President has the power to veto or sign the measure in part or in whole.
Crypto Regulations in More Regions
Panama isn’t the only country attempting to modernize its crypto regulations to make them more user-friendly. The Central African Republic and El Salvador both approved BTC as legal money. Portugal recently revealed plans to reform its cryptocurrency rules. The UAE just passed new legislation that allows crypto exchanges to register. While other countries continue to impose severe regulations, crypto is becoming more widely accepted around the world.