Panama’s Regulatory Framework Aims for FATF Compliance and VASP Licensing in Landmark Crypto Law

• Panama’s new draft regulation creates a complete regulatory framework for digital belongings, forward of the FATF assessment in 2027.
• The laws purpose to guard customers by transparency guidelines and a public register of approved service suppliers.

A bunch of Panamanian legal professionals have offered a draft regulation aimed toward establishing a complete regulatory framework for digital belongings. The initiative goals to deliver nationwide laws into line with the suggestions of the Monetary Motion Job Pressure in anticipation of the deliberate analysis in 2027.

Attorneys Belisario Castillo and Oliver Muñoz developed the doc with help from the Panamanian Capital Markets Affiliation. This effort is aimed toward producing a broad dialogue between the monetary sector, regulators and the chief department. Muñoz defined that the proposal represents a non-public initiative with sectoral help, supposed as a technical contribution to succeed in consensus and lift the extent of dialogue.

Proceed with studies about Panama about CNF. The doc was offered on October 28 to representatives of the monetary sector, regulators and leaders from the digital and authorized ecosystem.

Patricia Boyd, president of Apamecsaid that the group will actively promote this invoice to the competent authorities. The strategic goal includes positioning Panama as one of many main jurisdictions for monetary innovation within the area.

A regulatory framework for monetary sustainability

The proposal gives for the institution of a regulatory framework characterised by its inclusive and sustainable method. This framework is aligned with superior worldwide requirements and makes use of as a reference the regulatory progress applied by the EU European Union, Brazil and Argentina.

In keeping with Muñoz, the doc gives exact definitions for the classification of digital belongings. It additionally units out intimately which establishments will act as competent supervisors and the way the risk-based method beneficial by worldwide organizations can be utilized.

Muñoz said that not all digital belongings are the identical, making exact categorization essential to keep away from authorized loopholes. This precision ensures that conventional monetary sector corporations can take part below efficient and comprehensible laws.

One of many key parts of the proposal is the creation of a regulatory sandbox for supervised experimentation with expertise initiatives. It additionally consists of measures to advertise monetary inclusion, entice digital expertise and implement particular reforms to the present regulatory framework.

Compliance with worldwide suggestions as a precedence

Lawyer Oliver Muñoz emphasised that the initiative particularly goals to make sure that Panama complies with FATF Suggestions 15 and 16. These provisions relate to the regulation of digital asset service suppliers and the prevention of cash laundering and terrorist financing on this rising market.

Muñoz warned in regards to the concrete danger Panama faces if it fails to implement these suggestions earlier than the FATF go to in 2027. The doable consequence could be that the nation returns to the group’s grey checklist.

Argentina’s experiences present an essential reference level on this course of. Muñoz mentioned Argentina has accelerated laws to maneuver away from worldwide statement, demonstrating the significance of well timed and consensual motion. The lawyer emphasised that Panama shouldn’t wait till 2027 to improvise a settlement.

In keeping with him, the nation has adequate time to develop laws which might be tailor-made to its wants, well-planned and practical. Panama managed to go away the FATF grey checklist in 2023 and reached a historic milestone in July 2025 by formally leaving the European Fee’s checklist of high-risk nations for cash laundering.

Affect on the native digital asset ecosystem

The present state of affairs poses concrete challenges for corporations working with cryptocurrencies in Panama. Varied corporations have been offering providers with cryptocurrencies for years with out clear official laws.

Between 2021 and 2024, Panama was estimated to have seen a transaction quantity of greater than $4 billion on the ten most well-known international trade platforms alone. These figures affirm the true penetration of digital belongings into the Panamanian financial system and spotlight the urgency of addressing each the alternatives and challenges they symbolize.

Proposed construction for supplier regulation

The initiative units up a particular licensing and registration system for corporations providing cryptocurrency providers. These corporations known as Digital asset service suppliersshould get hold of a particular license and pay one thousand 5 hundred balboas for the preliminary license. Compliance with anti-money laundering and anti-terrorist financing requirements is a elementary requirement FATF requirements.

The proposal identifies the Directorate Common of Monetary Enterprises of the Ministry of Commerce and Business because the competent authority to control these corporations. Licensed suppliers can be topic to common inspections and should reveal adaptability to technological adjustments. The scope consists of important actions reminiscent of exchanging cryptocurrencies for different cryptocurrencies or conventional cash, preserving cryptocurrencies protected for third events and publicly providing new crypto initiatives.

Direct advantages for ecosystem customers

Customers of cryptocurrencies and trade platforms will expertise concrete enhancements of their safety. They may have entry to a public registry of corporations legally established in Panama, facilitating the identification of approved operators. Regulated corporations should present clear and full details about commissions and dangers related to their providers.

Customers have mechanisms to hunt compensation for damages suffered on account of fraud, gross negligence or safety failures attributable to the supplier.

The invoice additionally goals to draw severe crypto corporations and generate specialised employment on this fast-growing sector. The proponents have shared the initiative with the Ministry of Economic system and Finance and banking and securities market regulators.

Muñoz emphasised that the basic intention is to strengthen present initiatives within the Nationwide Meeting, a few of which have technical and authorized shortcomings.