Panama

**No Crypto-Specific Licensing Regime:** As of late 2023 / early 2024, there is no specific "virtual asset license" in Panama issued by a dedicated crypto regulator.

**General Business Registration:** Any company wishing to operate in Panama, including those involved in virtual assets, must still:

Be incorporated under Panamanian law (Public Registry).

Obtain a business license ("Aviso de Operación") from the Ministry of Commerce and Industries.

Comply with general tax and labor laws.

**Primary Relevance:** This is the most likely regulator to assert jurisdiction over virtual asset activities, mainly for AML/CFT compliance. Panama is a member of the Financial Action Task Force (FATF) and is committed to implementing its recommendations, which include regulating VASPs for AML/CFT purposes.

**Applicability:** Exchanges, custody providers, and payment processors dealing with virtual assets are highly likely to be considered "Designated Non-Financial Businesses and Professions" (DNFBPs) or fall under an extended interpretation of "financial activities" for AML purposes.

**Requirement:** While not a "license," these entities would need to register with the SSNF for AML/CFT oversight and comply with all associated requirements.

**Regulatory Reference:** **Law 23 of 2015** (Ley 23 de 2015, que adopta medidas para prevenir el blanqueo de capitales, el financiamiento del terrorismo y el financiamiento de la proliferación de armas de destrucción masiva). This law designates certain entities as "obligated subjects" (sujetos obligados) for AML/CFT purposes. While it doesn't explicitly name "VASPs," its broad scope and subsequent interpretations can cover them.

*URL for Law 23 of 2015 (Spanish):* Link to Gaceta Oficial for Ley 23 de 2015 (This is an older link, newer consolidated versions might exist via the Asamblea Nacional website)

**Relevance:** If the virtual asset is deemed a "security" under Panamanian law, then the SMV would have jurisdiction. This is a crucial distinction.

**Applicability:** Projects issuing tokens that represent ownership, a right to profit, or other characteristics of traditional securities would fall under the SMV's purview. Exchanges listing such tokens, or custody providers holding them, would then need to comply with securities regulations.

**Requirement:** A license as a broker-dealer, investment adviser, or other regulated entity under securities law might be required, depending on the specific service.

**Regulatory Reference:** **Law Decree 1 of 1999** (Decreto Ley 1 de 1999, por el cual se reorganiza el mercado de valores en la República de Panamá).

*URL for Law Decree 1 of 1999 (Spanish):* Link to Gaceta Oficial for Decreto Ley 1 de 1999

**Relevance:** Less likely to directly regulate pure crypto activities unless they involve fiat currency in a way that resembles traditional banking or payment services.

**Applicability:** If an exchange, custody provider, or payment processor holds significant fiat balances for clients, offers fiat-to-crypto conversion with a "trust" element, or provides services that closely mimic those of licensed financial institutions (e.g., issuing payment instruments that are essentially fiat-backed digital money), the SBP *might* assert jurisdiction. This is a high bar, as the SBP primarily regulates licensed banks and financial groups.

**Requirement:** A banking license or a license as a specific type of financial institution would be required, which is highly stringent.

**Regulatory Reference:** **Law Decree 2 of 2008** (Decreto Ley No. 2 de 2008, que regula la actividad bancaria en Panamá).

**No specific crypto VASP capital requirements.**

General corporate capitalization requirements apply for company formation.

If classified under securities or banking laws, significant capital requirements would apply (e.g., millions for a bank, hundreds of thousands for certain securities brokers).

**AML/KYC (Anti-Money Laundering / Know Your Customer):**

**CRITICAL.** This is the primary regulatory burden for virtual asset businesses in Panama.

Entities likely fall under **Law 23 of 2015**.

Implementing a robust AML/CFT compliance program.

Performing customer due diligence (CDD) and enhanced due diligence (EDD) where necessary.

Monitoring transactions for suspicious activities.

Reporting suspicious transactions (STRs) to the Financial Analysis Unit (UAF - Unidad de Análisis Financiero de Panamá).

Maintaining records for a specified period.

**Required for any registered Panamanian company.**

Must have a registered office address in Panama.

Must have a resident agent (a Panamanian lawyer or law firm).

Management (directors and officers) can be foreign, but generally, local operational presence is expected for active businesses.

Engage a Panamanian law firm to incorporate a company (e.g., a Sociedad Anónima or S.A.).

Register the company with the Public Registry of Panama.

**Business License (Aviso de Operación):**

Apply for an Aviso de Operación with the Ministry of Commerce and Industries (MICI). This typically requires specifying the business activities (e.g., "technology services," "software development," "electronic commerce," which would implicitly cover crypto, as there's no specific category).

If the business activity is deemed an "obligated subject" under Law 23 of 2015, register with the Superintendencia de Sujetos No Financieros (SSNF) and establish an AML/CFT compliance program.

Register with the Dirección General de Ingresos (DGI - Directorate General of Revenue) for tax purposes.

If there's any risk of the virtual asset being classified as a security or the services resembling regulated banking/payment services, proactive engagement with the SMV or SBP (through legal counsel) would be necessary to clarify regulatory standing and potential licensing requirements under their respective laws.

**Investment of Money (or assets):** The participant contributes value to the scheme.

**In a Common Enterprise:** The fortunes of the investors are linked to each other and to the success of the promoter.

**With an Expectation of Profit:** The primary motivation for the investment is financial gain.

**Principally from the Efforts of Others:** The profits are generated through the managerial or entrepreneurial efforts of the promoter or a third party, rather than the active participation of the investor.

**Security Tokens:** These are tokens explicitly designed to represent traditional securities (e.g., fractional ownership in real estate, company shares, bonds, or investment fund units). These would almost certainly be considered securities.

**Investment/Profit-Sharing Tokens:** Tokens that promise future profits, dividends, or a share in the project's success, where the holder's primary expectation is financial gain derived from the efforts of the token issuer or a third party, would be classified as securities. This includes many tokens issued through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs).

**Payment/Currency Tokens (e.g., Bitcoin, Ether):** Generally, widely decentralized cryptocurrencies like Bitcoin or Ether are not considered securities in Panama, similar to most jurisdictions, unless they are offered or packaged as part of an investment scheme (e.g., a managed crypto fund).

**Registration:** The issuer and the specific security (token) must be registered with the SMV. This involves:

Submitting a comprehensive prospectus detailing the project, the token's characteristics, financial information of the issuer, risks, and use of proceeds.

Providing corporate documentation and information about key personnel.

Ongoing reporting requirements, including financial statements and significant events.

**Exemptions:** Law Decree No. 1 provides certain exemptions from full registration, which could potentially apply to token offerings:

**Private Placements:** Offerings made to a limited number of qualified investors (e.g., institutional investors, high-net-worth individuals) may be exempt, subject to specific conditions and limitations on re-sale.

**Small Offerings:** Offerings below a certain monetary threshold or to a very small number of investors might also qualify for an exemption, though specifics would need to be checked against current SMV regulations.

Even with an exemption, Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) requirements, as well as general anti-fraud provisions, would still apply.

**Regulated Platforms:** Secondary trading of such tokens would ideally need to occur on exchanges licensed and regulated by the SMV. Panama's primary stock exchange is the Bolsa Latinoamericana de Valores (LATINEX, formerly Bolsa de Valores de Panamá). Any platform facilitating the trading of tokenized securities would likely need to be authorized as a broker-dealer or an exchange.

**Licensed Intermediaries:** Participants in the secondary market (e.g., brokers, dealers, investment advisors) would need to be licensed by the SMV.

**Market Conduct Rules:** All trading activities would be subject to market conduct rules, including prohibitions against market manipulation, insider trading, and other fraudulent practices.

**AML/CFT:** Secondary trading platforms and intermediaries would be subject to Panama's AML/CFT framework, notably **Law No. 23 of April 27, 2015**, and subsequent amendments, which require customer due diligence (KYC), suspicious transaction reporting, and other compliance measures.

A relatively nascent market for tokenized securities offerings originating directly from Panama.

The SMV generally focuses its enforcement on traditional securities violations and fraudulent schemes.

If a crypto offering were clearly fraudulent or violated securities laws, the SMV would typically issue **cease-and-desist orders**, impose **administrative fines**, and potentially refer cases to **prosecutorial authorities** for criminal charges under the existing legal framework for securities fraud.

**Superintendencia del Mercado de Valores (SMV) Official Website:** `https://www.smv.gob.pa/`

(Look for "Normativa" or "Marco Legal" for laws and regulations).

**Law Decree No. 1 of July 8, 1999 (General Law of the Securities Market):**

This is the foundational law. You'd typically find it linked on the SMV's "Normativa" section, or by searching the Official Gazette (Gaceta Oficial) archives. A direct, stable URL from the SMV can sometimes be tricky for specific laws, but searching for "Decreto Ley No. 1 de 1999 SMV Panamá" on Google often yields results from government sources.

*Example source (might not be the SMV's direct host, but contains the text):* `https://www.gacetaoficial.gob.pa/pdfTemp/23838_A/GacetaOficial_23838A_19990708.pdf` (This is the Gaceta Oficial publication).

**Law No. 23 of April 27, 2015 (Anti-Money Laundering and Counter-Financing of Terrorism):**

This law, and its subsequent amendments, govern AML/CFT for financial institutions and designated non-financial businesses and professions, including those dealing with virtual assets if they fall under the definition of financial activities.

*Example source (again, potentially Gaceta Oficial):* `https://www.gacetaoficial.gob.pa/pdfTemp/27776_A/GacetaOficial_27776A_20150428.pdf`

**Law 23 of April 27, 2015 (Ley 23 de 27 de abril de 2015):** This is the foundational AML/CFT law in Panama. It adopted measures to prevent money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction. It established the Financial Analysis Unit (UAF) and defined "obligated subjects" (sujetos obligados), which, through subsequent interpretations and amendments, have come to include VASPs. This law sets general obligations for customer due diligence, suspicious transaction reporting, and record-keeping.

**Executive Decree 44 of April 15, 2016 (Decreto Ejecutivo N° 44 de 15 de abril de 2016):** This decree complements Law 23, providing detailed regulations for its application, including specific procedures for due diligence, risk assessment, and internal controls for obligated subjects.

**Law 1 of January 5, 2024 (Ley No. 1 de 5 de enero de 2024):** This is the most crucial and recent piece of legislation specifically for virtual assets. It amends Law 23 of 2015 and other related laws to define virtual assets and virtual asset service providers (VASPs), establish a licensing and supervision regime, and explicitly subject VASPs to AML/CFT obligations under the supervision of the Superintendency of Banks of Panama (SBP). This law ensures Panama's compliance with FATF Recommendation 15 on new technologies and VASPs.

**Superintendencia de Bancos de Panamá (SBP) - Superintendency of Banks of Panama:**

**Role:** With the enactment of Law 1 of 2024, the SBP is now the primary regulatory and supervisory authority responsible for the licensing, authorization, and oversight of VASPs in Panama. This includes ensuring their compliance with AML/CFT requirements, operational standards, and consumer protection.

**Unidad de Análisis Financiero (UAF) - Financial Analysis Unit of Panama:**

**Role:** The UAF is Panama's Financial Intelligence Unit (FIU). It is responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other relevant financial intelligence to combat money laundering, terrorism financing, and the financing of the proliferation of weapons of mass destruction. VASPs, as obligated subjects, must report suspicious activities directly to the UAF.

**For Individuals:** Obtaining and verifying the identity of the customer and beneficial owner (if different from the customer) using reliable, independent source documents, data, or information (e.g., government-issued ID, passport, proof of address).

**For Legal Entities/Arrangements:** Obtaining and verifying the legal name, legal form, proof of existence, powers that regulate and bind the entity, names of relevant persons (directors, partners), and the identity of beneficial owners (those ultimately owning or controlling more than a specified percentage, typically 10% or 25%).

**Understanding the Purpose and Nature of the Business Relationship:** Gathering information on the customer's financial activities, expected transaction types, and the source of funds/wealth.

**Ongoing Monitoring:** Continuously monitoring the business relationship and transactions to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile. This includes scrutinizing complex, unusual large transactions, and all unusual patterns of transactions that have no apparent economic or lawful purpose.

**Enhanced Due Diligence (EDD):** Applying EDD measures for high-risk customers, business relationships, or transactions, which include:

Politically Exposed Persons (PEPs) and their family members and close associates.

Customers from high-risk jurisdictions identified by FATF or local authorities.

Transactions involving new or developing technologies that might favor anonymity.

Obtaining additional information on the customer, beneficial owner, source of funds/wealth, and reasons for intended transactions.

Obtaining senior management approval for establishing or continuing high-risk relationships.

**Simplified Due Diligence (SDD):** Permitted in clearly defined low-risk scenarios, provided there is sufficient information to justify such an approach.

**Obligation to Report:** VASPs are legally obligated to report any suspicious transaction or activity to the UAF, regardless of the amount. A transaction is suspicious if the VASP has reasonable grounds to suspect that it may be related to money laundering, terrorism financing, or other illicit activities.

**No Tipping-Off:** VASPs, their employees, and officers are prohibited from disclosing to the customer or any third party that an STR has been or will be submitted.

**Content of Report:** STRs must include all relevant information available to the VASP, such as customer identification details, transaction specifics, and the grounds for suspicion.

**Duration:** Records must typically be kept for at least **five (5) years** after the business relationship has ended or after the date of the transaction.

All customer identification and verification data obtained through CDD/EDD processes.

Transaction records, including the amount, currency, date, and parties involved (including "Travel Rule" information for virtual asset transfers).

Records of analysis undertaken for suspicious transactions.

Internal policies, procedures, and training materials.

**Risk Assessment:** Conducting a comprehensive risk assessment of their business, customers, products, services, and geographical areas of operation to identify, assess, and understand their ML/TF risks.

**Designated Compliance Officer:** Appointing a qualified AML/CFT compliance officer at a senior management level, responsible for overseeing the implementation and effectiveness of the AML/CFT program.

**Internal Policies and Procedures:** Developing and implementing clear internal policies, procedures, and controls to mitigate identified risks and ensure compliance with AML/CFT obligations.

**Training:** Providing regular and ongoing AML/CFT training to all relevant employees to ensure they understand their obligations and can identify and report suspicious activities.

**Independent Audit:** Establishing an independent audit function to periodically test the effectiveness of the AML/CFT program.

**"Travel Rule" Compliance:** As per FATF recommendations, VASPs must transmit required originator and beneficiary information (name, account number, physical address, national ID number, customer ID number, date and place of birth, etc.) for virtual asset transfers above a certain threshold (typically equivalent to USD 1,000) to the beneficiary VASP, and vice versa.

**Classification of Stablecoins (E-money/Payment Tokens/Securities):**

**No explicit classification:** Due to the lack of specific stablecoin legislation, Panama has not explicitly classified stablecoins as e-money, payment tokens, or securities under a dedicated framework.

**Potential interpretation under existing laws:**

**E-money/Payment Tokens:** If a stablecoin is pegged to a fiat currency (e.g., USD) and primarily functions as a means of payment or value transfer, it *could* potentially be interpreted as an electronic payment instrument or a form of e-money, bringing it under the purview of the **Superintendencia de Bancos de Panamá (SBP)**, which regulates banks and financial institutions. This would necessitate compliance with existing banking and payment services regulations.

**Securities:** If a stablecoin's structure involves an expectation of profit from the efforts of others (e.g., through staking rewards, a share in the issuer's profits, or specific investment features), or if it represents an ownership interest in a pool of assets, it *could* be classified as a security. In such cases, the **Superintendencia del Mercado de Valores (SMV)** would likely assert jurisdiction, requiring compliance with securities laws.

**Commodity/Other:** If a stablecoin is backed by a commodity or has other unique characteristics, its classification would be assessed on a case-by-case basis.

**No specific stablecoin reserve requirements:** As there is no dedicated stablecoin regulation, there are no specific reserve requirements for stablecoin issuers.

**Potential requirements if classified otherwise:** If a stablecoin issuer were to be classified as a bank, e-money issuer, or financial entity under the SBP's jurisdiction, then the existing capital, liquidity, and reserve requirements for those regulated entities would apply. This would typically involve holding sufficient liquid assets (fiat currency, government bonds) to cover liabilities.

**No specific stablecoin issuer license:** Panama does not have a specific license for stablecoin issuers.

**Potential licensing if classified otherwise:**

If the stablecoin activity is deemed banking or e-money issuance, the entity would likely need a banking or financial services license from the **Superintendencia de Bancos de Panamá (SBP)**. Obtaining such a license is a rigorous and lengthy process.

If the stablecoin is deemed a security, the issuer and any platforms facilitating its trading would need to comply with the licensing requirements of the **Superintendencia del Mercado de Valores (SMV)** for securities issuers, brokers, or exchanges.

**AML/CFT Registration:** All entities dealing with financial transactions, including those potentially involving crypto assets, are subject to the **Financial Analysis Unit (UAF - Unidad de Análisis Financiero)** regulations regarding AML/CFT. Even in the absence of a specific crypto license, entities involved in facilitating crypto transactions would need to comply with reporting obligations.

**No explicit stablecoin redemption rights legislation:** There are no specific laws in Panama mandating redemption rights for stablecoin holders.

**Reliance on general contract law/terms of service:** Redemption rights would primarily be governed by the terms and conditions set forth by the stablecoin issuer and the smart contract (if applicable). General consumer protection laws or contract law could provide a basis for disputes, but a specific framework for stablecoins is absent.

**None:** Given the lack of a basic regulatory framework for even fiat-backed stablecoins, there are no specific rules or prohibitions regarding algorithmic stablecoins in Panama. Such assets would likely face even greater scrutiny if they were to achieve significant traction, given their inherent volatility risks.

**Exploration Phase:** Panama's central bank (National Bank of Panama - BNP) has publicly indicated an interest in exploring Central Bank Digital Currencies (CBDCs), but it is primarily in the research and study phase. There are no concrete plans for issuance or specific policies on how a Panamanian CBDC would interact with private stablecoins.

Currently, there is no direct regulatory interaction or framework defined for private stablecoins in relation to a potential Panamanian CBDC, as the latter is still conceptual.

**Ley No. 697 de 2022 (Vetoed in part):** This law attempted to establish a comprehensive framework for crypto assets. While ultimately vetoed in significant parts, it represents the most direct legislative effort concerning cryptocurrencies.

*Reference:* Gaceta Oficial Digital, No. 29541-A (May 2022). (Finding a direct official URL for the fully passed and vetoed version can be challenging due to the dynamic nature; often news sources provide summaries.)

*Example News/Analysis of the Veto:*

Panama's Presidency Veto Statement (Spanish): Search "Comunicado de Prensa de la Presidencia de la República de Panamá Veto Ley de Criptoactivos" (Specific URL may vary).

**Superintendencia de Bancos de Panamá (SBP):**

Regulates banking and financial institutions. Relevant if stablecoins are deemed e-money or deposit-like.

**Superintendencia del Mercado de Valores (SMV):**

Regulates securities markets. Relevant if stablecoins are deemed securities.

**Unidad de Análisis Financiero (UAF):**

Panama's Financial Intelligence Unit, responsible for AML/CFT regulations and reporting. All financial sector participants must comply.

**FATF (Financial Action Task Force):** Panama's ongoing efforts to comply with FATF recommendations heavily influence its approach to financial regulation, particularly concerning new technologies like crypto assets.

Custodial license requirements for digital assets.

Segregation of client assets rules for digital assets.

Insurance or bonding requirements for digital asset custodians.

Cold storage mandates for digital asset custodians.

A formal definition of "qualified custodian" for digital assets.

**Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Laws:**

Panama has a robust AML/CFT framework, primarily driven by international standards from the Financial Action Task Force (FATF).

**Law 23 of 2015 (Ley 23 de 2015):** This law adopts measures to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction. While it doesn't explicitly mention "digital asset custody," financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) are subject to its requirements. If a crypto business falls under the scope of a DNFBP (e.g., as a money remitter, trust provider, or even a general financial service provider handling significant value transfers), it would need to comply with KYC (Know Your Customer), transaction monitoring, and suspicious activity reporting requirements.

**Unidad de Análisis Financiero (UAF - Financial Analysis Unit):** This is Panama's Financial Intelligence Unit (FIU) responsible for receiving, analyzing, and disseminating suspicious transaction reports. Any crypto entity engaging in activities that might be considered financial services or value transfers could fall under UAF scrutiny for AML/CFT purposes.

Ley 23 de 2015: https://www.gacetaoficial.gob.pa/pdfTemp/27763_A/53916.pdf (Official Gazette link, in Spanish)

**Superintendency of Banks of Panama (SBP) and Superintendency of Securities Market (SMVP):**

These traditional financial regulators have primarily issued **warnings and advisories** regarding the risks associated with cryptocurrencies. They have generally clarified that cryptocurrencies are *not* recognized as legal tender, do not fall under the existing banking or securities laws, and entities dealing with them are not regulated by these bodies unless they offer traditional financial services with crypto as an underlying asset.

They have advised regulated entities to exercise extreme caution and assess risks, including AML/CFT, cybersecurity, and operational risks, if engaging with crypto.

SBP warnings (example, may require navigating their site for current advisories): https://www.superbancos.gob.pa/

SMVP warnings (example, may require navigating their site for current advisories): https://www.smv.gob.pa/

**Bill 697 / Law 173 (Proyecto de Ley No. 697 / Ley 173):** This bill aimed to regulate the commercialization, use, and issuance of digital assets and create a framework for their recognition, custody, and tokenization. It specifically included provisions for:

**Licensing:** Establishing a licensing regime for virtual asset service providers (VASPs), which would likely include custodians.

**Operational Requirements:** Laying out rules for operational security, consumer protection, and potentially aspects like asset segregation.

**AML/CFT Integration:** Explicitly integrating digital asset businesses into the existing AML/CFT framework.

**Regulatory Oversight:** Designating regulatory bodies for different aspects of digital assets.

**Status: Partially Vetoed:** The bill passed the National Assembly in April 2022. However, President Laurentino Cortizo partially vetoed it in June 2022.

**Reasons for Veto:** The President cited concerns about the bill's lack of alignment with FATF recommendations regarding AML/CFT, potential risks to the financial system, and the need for more robust regulatory oversight and technical clarity. He argued that it did not sufficiently protect the national financial system and investors from money laundering and other illicit activities.

**Current Status:** The bill was returned to the National Assembly for reconsideration of the vetoed articles. As of now, it remains in legislative limbo, meaning the comprehensive framework it proposed, including specific custody regulations, is **not currently in force**.

Information about the bill's passage (news articles and parliamentary records often cite "Proyecto de Ley No. 697" or "Law 173"): You would typically find records on the National Assembly of Panama's website. For example, searching their archives for "Proyecto de Ley 697": https://www.asamblea.gob.pa/

News articles from reputable financial news outlets (e.g., Reuters, CoinDesk, Bloomberg) from April-June 2022 would detail the bill's passage and subsequent veto.

**Evolving Regulatory Framework:** Panama has been discussing comprehensive cryptocurrency regulation, most notably with Bill 697, which was partially vetoed in 2022. This lack of a clear, dedicated crypto legal framework means that enforcement would likely fall under existing general financial laws (e.g., anti-money laundering, fraud), making it harder to categorize specifically as "crypto enforcement."

**Focus on AML/CFT:** Panama was on the FATF grey list until October 2023, which heavily emphasized improving its Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regime. While this pressure indirectly affects crypto (as it's a known vector for financial crime), direct, high-profile enforcement actions against crypto entities with specific fines haven't been widely publicized as a result.

**Publicity Practices:** Panamanian financial regulators (like the Superintendencia de Bancos de Panamá - SBP, or Superintendencia del Mercado de Valores - SMV, or the Unidad de Análisis Financiero - UAF) may not always publicize enforcement actions with the same level of detail as regulators in jurisdictions like the United States or Europe. Criminal investigations would fall under the Ministerio Público (Public Ministry), and details are often restricted during ongoing proceedings.

**Regulator Name:** Superintendencia de Bancos de Panamá (SBP) - Banking Superintendent of Panama

**Entity Targeted:** Financial institutions under its supervision, and the general public.

**Violation Type (Implied):** Operating without proper licensing for financial services involving crypto, and general financial risk to consumers.

**Penalty Amount:** Not applicable (these are warnings, not direct fines).

**Date:** Ongoing, but prominent warnings were issued in 2022 and 2023.

**Outcome:** Increased awareness among regulated entities and the public about the risks and the SBP's stance that crypto activities are not regulated by them and do not carry deposit insurance.

**SBP Circulars and Statements on Crypto Risks:**

The SBP has repeatedly issued statements clarifying that cryptocurrencies are not legal tender in Panama, are not regulated by the SBP, and entities under its supervision (banks) should exercise extreme caution and assess risks related to crypto assets. They have warned against financial institutions engaging in crypto activities without proper risk management and adherence to existing AML/CFT regulations.

**Source (Example of SBP's position from 2022, reflective of current stance):**

**SBP Comunicado (Press Release) - 2022:** "La Superintendencia de Bancos reitera la no validez de las criptomonedas como medio de pago o moneda de curso legal y la no regulación y supervisión sobre ellas." (The Superintendency of Banks reiterates the invalidity of cryptocurrencies as a means of payment or legal tender and the lack of regulation and supervision over them.)

Superintendencia de Bancos de Panamá Official Website (Navigate to "Comunicados" or "Prensa" for recent statements on crypto risks, often in the context of the failed Bill 697).

**Failed Cryptocurrency Law (Bill 697):**

In 2022, Panama's National Assembly approved Bill 697, which aimed to regulate crypto assets. However, President Laurentino Cortizo partially vetoed it, citing concerns about its AML/CFT provisions and the need for more robust regulation under the existing framework. This highlights the government's struggle to establish a clear regulatory path, which precedes significant enforcement.

Reuters Article on Veto of Crypto Bill

Bloomberg Article on Panama's Crypto Bill

Regulatory *warnings* about the risks and unregulated nature of crypto.

An *attempt to legislate* that faced a partial veto.

An underlying focus on strengthening general AML/CFT frameworks (partially due to FATF pressure).