Laurentino Cortizo, the President of Panama, has partially vetoed a bill that would have regulated Bitcoin and legalized decentralized autonomous organizations (DAOs). Local media outlet La Prensa reported yesterday after obtaining a copy of the 32-page veto.
Cortizo vetoed Bill No. 697 (Crypto Law) for failing to adapt to rules that regulate the Panamanian banking system. While Cortizo admitted the proposal is new, he said it must adapt to Panama’s monetary system. According to him, this system has seen the country maintain economic and fiscal stability.
At the same time, it is imperative to conform the new regulation with the recommendations of the FATF [International Financial Action Task Force], in order to continue the path defined by the State in terms of fiscal transparency and prevention of money laundering.
However, it is worth noting that President Cortizo’s decision to veto the crypto bill is not a surprise. In the past month, he called the legislation innovative. Nonetheless, he said he would veto its current version. At the time, Cortizo said he wanted guarantees that the bill complies with global anti-money laundering standards.
Lawmaker Behind the Bill Says Panama is Losing Out
The legislation will now go back to the National Assembly, which previously passed it in April.
Aprobado en tercer debate el Proyecto de Ley No.697, que regula la comercialización y uso de criptoactivos, la emisión de valor digital, la tokenización de metales preciosos y otros bienes, los sistemas de pagos y dicta otras disposiciones. pic.twitter.com/a5e3niq5vX
— Asamblea Nacional (@asambleapa) April 28, 2022
Upon learning of the veto, Gabriel Silva, the lawmaker that helped draft Bill No. 697, said Panama would lose out on many opportunities. According to him, vetoing the Crypto Law will cost Panama opportunities to create jobs, attract investments, and integrate technology and innovation in the public sector.
Hoy presentamos la Ley de Cripto. Buscamos hacer a Panamá un país compatible con el blockchain, los criptoactivos y el internet.
Esto tiene el potencial de crear miles de empleos, atraer inversión y transparentar el gobierno
— Gabriel Silva (@gabrielsilva8_7) September 6, 2021
He added that Panama deserves more opportunities and financial inclusion.
Keen to ensure the bill passes into law, Silva said,
We are studying the veto to make the corrections, but we must keep the law competitive The discussion must now go to the Government Commission (to see what is unconstitutional) and to the Trade Commission (what is inconvenient) Then 2nd and 3rd debate. Only what is vetoed is discussed.
If signed into law, Bill No. 697 will offer Panamanians an option to spend crypto freely in everyday purchases. Additionally, they would be able to pay taxes, fees, and duties to the government in crypto. On top of this, the legislation would recognize DAOs as legal entities.
The bill would also create the framework for Panama to issue tokenized securities and commodities through Security Token Offerings (STOs).