The law came to a grinding halt as Panama’s President Laurentino Cortizo cited an absence of anti-money laundering norms and short adaption to the current financial system for rejection.
Congressman Gabriel Silva had earlier tweeted about the possibility of a partial veto by the President. According to Silva, the National Assembly will study the bill and propose possible corrections.
Last month, President Cortizo hinted at his desire to comply with the proposed laws with international anti-money laundering standards while suggesting that he was in no haste to sign it immediately.
In an interview with Bloomberg on May 19, the President said:
“I have to be very careful if the law has clauses related to money laundering activities.”
The bill approved by the Parliament two months ago would’ve allowed cryptocurrencies to be used as a medium of payment for everyday goods. Banks, citizens, and other institutions within the country could pay with Bitcoin, Ethereum, XRP, Litecoin, and Stellar even for government taxes and fees.
It also attempted to recognize DAOs (Decentralized Autonomous Organizations) as formal entities and provide a regulatory framework for their operations to issue security token offerings (STOs).
Once the bill has passed, Panama will become the second Latin American country to allow crypto payments. El Salvador is the world’s first country that made Bitcoin a legal tender last year. There’s also a compulsion on businesses in the country to accept Bitcoin, provided they have the technological means.
Other countries in Latin America, including Argentina, Brazil, and Cuba, have favorable crypto regulations. The region witnessed a staggering 1,370% rise in crypto usage from 2019 to 2022.