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Panama halts granting crypto a legal status

TL;DR Breakdown
  • Panama halts legal status of crypto
  • President Cortizo wants to fix AML rules
  • Exchanges left in limbo with the new update

Panama has chosen to take a backpedal over the legalization of digital assets across the country, citing one integral factor. According to several reports, President Laurentino Cortizo of Panama has said that he will not affix his signature on the crypto bill. In the statement, the president said that the only way a reversal can be triggered is to ensure that rules that will eliminate money laundering in the sector are added to the crypto bill. However, this decision is coming hot on the hills of exchanges and individuals hoping to enter the market as soon as the bill is signed.

The President of Panama wants to fix AML rules

Panama announced some months ago that it was ramping up efforts to ensure that exchanges and digital assets in the country were licensed. However, the bill will require the president’s signature to be passed into law, one that he is not ready to affix on it. The president believes that it is integral to our money-laundering rules, seeing that the country has seen cases like that skyrocket in the last few years.

The country has also seen other crimes stemming from money laundering emanate from the crypto sector, one reason why the president is unwilling to sign the bill. Without regulations to curb the act, Panama has been included in the list of countries with weak AML rules by the FATF. However, the president noted that his administration is currently looking into the types of laws that would be effective and would send their recommendations to the body.

The New update leaves exchanges in limbo

The country sees this rule as integral because using digital assets will provide leverage for people moving money abroad through crypto. There is a consensus that crypto could well lift the financial system in the country. Banks will also adopt digital assets, providing custodian services to the unbanked who will not be able to operate wallets and the like. Although the lawmakers believe that using crypto would spell well for the country, others are worried about the regulations in the sector.

With the assembly passing the crypto bill some weeks ago, exchanges have been eager to kickstart their operations in the country. Deribit is set to commence its derivatives services in the country after working extensively on its KYC regulation. With the way things stand, exchanges are uncertain of a start date in the country. Crypto adoption continues to skyrocket in Panama as citizens patronize crypto and NFTs. Even amid the market downturn, traders are still stacking up their wallets. The country is also seriously considering the adoption of blockchain technology in the coming years.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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