The saga of Panama's cryptocurrency bill has reached a new chapter, with the country's Supreme Court set to decide the future of the local crypto industry.
Panamanian President Laurentino Cortizo on Jan. 26 sent The crypto legislation passed to the high court last year for review, alleging that the so-called "crypto bill" violates basic principles of the constitution and is unenforceable.
The Supreme Court must now decide whether to declare Bill No. 697 unenforceable or approve it with modifications.
According to According to an official communiqué, the Presidency of the Republic considers articles 34 and 36 of the bill inapplicable because they violate the separation of powers of the State and establish administrative structures within the government.
President Cortizo also argued that the bill had been approved through an improper procedure following his partial veto of the legislation in June. At the time, the president argued that the bill needed more work to comply with the new regulations. recommended by the International Financial Action Task Force aimed at improving fiscal transparency and preventing money laundering.
Related: The 5 most important regulatory developments for cryptocurrencies in 2022
A dispute between the National Assembly of Panama and the government has centered on this bill. In April, Panamanian legislators approved a legislative proposal with the aim of regulating cryptocurrencies in the country, including Bitcoin. President Cortizo, however, warned a few weeks later that would not sign unless it included additional anti-money laundering (AML) rules.
The bill was introduced in September 2021, with the goal of making the country "compatible with the digital economy, blockchain, crypto assets, and the Internet." It was removed from the Economic Affairs Committee on April 21 and approved a few days later.
Based on the legislation, Panamanians "may freely agree to the use of crypto assets, including, among others, Bitcoin and Ethereum" as an alternative payment for "any civil or commercial operation."
Additionally, the bill would regulate the tokenization of precious metals and the issuance of digital value. Digitization of identity through blockchain or distributed ledger technology it would also be explored by the government's innovation authority.
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