{"id":151934,"date":"2026-10-30T10:02:48","date_gmt":"2026-10-30T10:02:48","guid":{"rendered":"https:\/\/www.legal500.com\/guides\/?post_type=comparative_guide&#038;p=151934"},"modified":"2026-10-30T11:05:41","modified_gmt":"2026-10-30T11:05:41","slug":"panama-blockchain-crypto-assets","status":"publish","type":"comparative_guide","link":"https:\/\/www.legal500.com\/guides\/chapter\/panama-blockchain-crypto-assets\/","title":{"rendered":"Panama: Blockchain &amp; Crypto Assets"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-151934","comparative_guide","type-comparative_guide","status-publish","hentry","guides-blockchain-crypto-assets","jurisdictions-panama"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Pacifica Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/10\/Logo-Pacifica-Legal.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Pacifica Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/10\/Logo-Pacifica-Legal.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Blockchain &amp; Crypto Assets laws and regulations applicable in Panama<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please provide a high-level overview of the blockchain market in your jurisdiction. In what business or public sectors are you seeing blockchain or other distributed ledger technologies being adopted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although some initiatives have been implemented for the use of blockchain in the public sector, blockchain and digital asset markets in Panama are primarily driven by the private sector. Panama is increasingly attracting well-established and internationally recognized projects, primarily for strategic purposes and corporate structuring rather than serving the domestic market.<\/p>\n<p>These projects establish Panamanian entities to run whole or part of their business. Most of the time these entities operate outside of the territory of Panama, meaning that they do not offer their products or services to Panamanian residents. This is in part for regulatory but also taxation purposes, as Panama&#8217;s tax system is territorial based. Outside of tax, the country&#8217;s appeal is often structural, Panama offers a very straightforward but solid set of entities, including corporations and foundations which are frequently used for these types of automated and decentralized systems. Panamanian entitles can be used for a specific aspect of a project, e.g., protocol, treasury, governance, intellectual property, front-end\/UI. Separating each function or feature also allows ring fencing of risk and liabilities.<\/p>\n<p>The types of projects established in Panama have evolved and adapted to changes in the industry, as it is becoming more institutional. Projects that are currently thriving include:<\/p>\n<ul>\n<li>Vaults and curators;<\/li>\n<li>Decentralised exchanges (DEXs) and perpetual futures (perps);<\/li>\n<li>Non-custodial wallets and DeFi Protocols;<\/li>\n<li>Stablecoins issuance and payment rails;<\/li>\n<li>Staking, liquid staking and yield products;<\/li>\n<li>Borrowing and lending protocols;<\/li>\n<li>Token issuers; and<\/li>\n<li>Tokenized real-world assets (RWAs).<\/li>\n<\/ul>\n<p>Public-sector examples remain limited. In 2019 the Ministry of Commerce and Industries announced a blockchain-based platform to digitise industrial registrations, and the executive proposed using blockchain to add traceability to public procurement. More recently, in April 2025, the Municipality of Panama City approved the acceptance of Bitcoin, Ether, USDC and USDT for municipal taxes, fees and permits, converted into US dollars by an authorised bank. In the same year the state-owned Caja de Ahorros announced plans for a digital-asset wallet.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please outline the principal legislation and the regulators most relevant to the use of blockchain technologies in your jurisdiction. In particular, is there any blockchain-specific legislation or are there any blockchain-specific regulatory frameworks in your jurisdiction, either now or envisaged in the short or mid-term?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>Current regulatory summary<\/em><\/p>\n<ul>\n<li>As of the date of this article, there is no blockchain-specific regulation in Panama. There is no Virtual Asset Services Provider (VASP) regime, nor any regulation that covers cryptocurrencies or blockchain-related activities.<\/li>\n<li>Cryptocurrencies or crypto assets themselves are not inherently considered securities or legal tender.<\/li>\n<li>Blockchain or crypto-related activities are mainly considered legal yet unregulated. The main legal provision for this conclusion is Article 18 of the Constitution of Panama, which covers the principle of legality, whereby any private person can do anything not expressly prohibited by law. As such, a Panamanian entity can therefore (a) issue, mint, sell, distribute, trade, airdrop crypto assets or (b) own and operate a blockchain-based platform, including an exchange offering spot and derivative products.<\/li>\n<li>This has been the position in the opinions and notices issued by the Superintendency of the Securities Market (SMV) and the Superintendency of Banks of Panama (SBP). Because the activity remains unregulated, neither the SMV nor the SBP considers itself the competent authority to supervise or oversee crypto-related activities, including tokens and cryptocurrencies.<\/li>\n<li>A Panamanian entity carrying out these activities would therefore not need any license, approval or consent from a regulator in Panama, provided that its activities do not involve securities, financial instruments or banking activities.<\/li>\n<\/ul>\n<p><em>Main Applicable Legislation <\/em><\/p>\n<p>Considering that distributed ledger technologies and crypto-related activities remain unregulated, and that there is no specific regulation that covers them, one would have to rely on the existing legislative framework to determine the scope of applicability and regulatory perimeter. Among the most frequent laws to consider are:<\/p>\n<ul>\n<li>The Unified Text of the Securities Market of Panama, Decree-Law 1 of 1999 as amended and consolidated (the \u201cSecurities Market Law\u201d<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a>);<\/li>\n<li>Executive Decree 52 of 2008 (the \u201cBanking Law\u201d<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a>);<\/li>\n<li>Law 48 of 2003 (the &#8220;Remittance Law\u201d<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a>)<\/li>\n<li>Law 23 of 2015, as amended (the \u201cAML\/CFT\/CPF Law\u201d);<\/li>\n<li>Law 25 of 1995 on private interest foundations and Law 32 of 1927 on corporations (<em>sociedades an\u00f3nimas<\/em>), the main vehicles for corporate structures.<\/li>\n<li>Law 81 of 2019 on personal data protection and regulations.<\/li>\n<li>Law 478 of 2025 on cybercrime.<\/li>\n<li>Decree-Law 2 of 1998 and Resolution 65 of 2002 (as amended in 2020) on games of chance and online gaming.<\/li>\n<li>The Fiscal Code, and the recently approved Law 526 of 28 May 2026 on economic substance for foreign-source passive income, with its regulation.<\/li>\n<li>The Civil Code and the Commercial Code.<\/li>\n<\/ul>\n<p><em>Regulatory Proposals and Envisaged legislation<\/em><\/p>\n<p>Between 2025-2026 there was a surge of legislative proposals related to VASPs, use and commercialization of cryptocurrencies and regulatory sandboxes, these include the following draft bills: Bill 247\/2025<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a>, Bill 326\/2025<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a>; Bill 424\/2025<a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a>; Bill 427\/2026<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a>; and a draft promoted by the Panamanian Capital Markets Association (APAMEC) and submitted to the Ministry of Economy and Finance in late 2025, proposing VASP licensing, a regulatory sandbox and targeted amendments to securities and tax rules.<\/p>\n<p>None of these proposals seemed to have the alignment required to be approved. That said we believe regulatory changes are soon coming to Panama. The main drive for this is alignment with Financial Action Task Force standards, which includes FATF Recommendation 15 and 16 related to VASPs and Travel Rule. Moreover, Panama has signed the OECD Crypto-Asset Reporting Framework (CARF) Multilateral Competent Authority Agreement. Our prediction is that in the near future we could be seen: (a) a VASP-type of regulatory proposal; (b) a reform on the securities market regulation and more issuance of SMV\u2019s opinion in relation to tokenized securities; and (c) a regulation surrounding stablecoins and tokenized deposits.<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> The Unified Text of the securities market in the Republic of Panama and the Superintendency of the Securities Market, that comprises the Decree-Law 1 of 1999 and the laws amending it, including Law 67 of 2011, (modified by Law No. 12 of 3 April 2012 and Law No. 56 of 2 of October 2012); and the Law 66 of 2016. [Gazette No.26979-A 23 February 2012].<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> Executive Decree No.52 that adopts the Unified Text of Decree Law 9 of 1998, modified by Decree Law 2 of 2008.<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> Law 48 of 23 June 2003, which regulates the operations of money remittance houses.<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> Bill 247\/2025: public policy on the use, commercialisation and supervision of cryptocurrencies, promotion of the digital economy and consumer protection.<\/p>\n<p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a> Bill 326\/2025: a VASP supervision, registration and control regime aligned with Financial Action Task Force (FATF) AML\/CFT standards.<\/p>\n<p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a> Bill 424\/2025: a VASP licensing and supervision framework.<\/p>\n<p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a> Bill 427\/2026: a comprehensive fintech framework that would create a \u2018Licence for Digital Assets and Crypto-Assets\u2019 covering issuance, custody, exchange and management of crypto-assets, tokens, NFTs and stablecoin<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current attitude of the government and of regulators to the use of blockchain technology in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>Regulators <\/em><\/p>\n<p>In Panama, there is no blockchain-specific regulator. Consequently, the most relevant authorities related to the present matter are:<\/p>\n<ul>\n<li>Superintendency of the Securities Market (SMV): for securities and capital markets;<\/li>\n<li>Superintendency of Banks of Panama (SBP): banks, trusts and registered activities;<\/li>\n<li>Unidad de Analisis Financiero (UAF): Panama\u2019s financial intelligence unit.<\/li>\n<li>Superintendency of Non-Financial Obligated Subjects (SSNF): AML supervision of designated non-financial businesses and professions, including resident agents.<\/li>\n<li>Junta de Control de Juegos (JCJ), the gaming control board;<\/li>\n<li>Direcci\u00f3n General de Ingresos (DGI), Panama&#8217;s tax authority.<\/li>\n<\/ul>\n<p>The best description is open and neutral. Panamamanian authorities neither promote nor restrict blockchain technology. Regulators have taken a consistent, perimeter-based approach. They ask whether an activity amounts to securities dealing, banking, custody, remittance or gambling and, if it does not, they decline jurisdiction.<\/p>\n<p>The SMV has been the most consistent voice providing guidance to where the fine line is an overall grey area. In the last decade, its opinions have held that it has no supervisory competence over virtual currencies (Opinion 7-2018); that crypto-assets fall outside the statutory definitions of \u2018security\u2019 and \u2018money\u2019 (Opinion 1-2023); that crypto-assets and crypto derivatives are outside the regulated activities of investment advisers and brokerage firms (Opinion 5-2023); that a non-custodial platform for exchanging Bitcoin and Ether, where users keep their own keys, requires no licence or registration (Opinion 4-2025); and that prediction markets fall outside the securities regime (Opinion 01-2026 of 29 April 2026). In Opinion 4-2024 the SMV may have signalled an intention to regulate derivatives, but nothing has been adopted. The SBP has said since 2018 that the exchange, investment and commercialisation of cryptocurrencies are not specifically regulated and fall outside its competence, while expecting banks to apply due diligence to crypto-related clients.<\/p>\n<p>Political attitudes are warmer. The Panama City municipality\u2019s acceptance of crypto for municipal payments and Caja de Ahorros\u2019 announced digital-asset products show interest at municipal and state-bank level, and the National Assembly has shown renewed interest since 2025. The executive\u2019s focus, however, is on keeping Panama off international grey and black lists. Panama left the FATF grey list in 2023 and the EU list of high-risk third countries in 2025,\u00a0 and is soon to come out of the EU List of Non-Cooperative Jurisdictions for Tax Purpose. That focus explains both the AML orientation of the current bills and Panama\u2019s commitment to the Organisation for Economic Co-operation and Development (OECD) Crypto-Asset Reporting Framework (CARF).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a central bank digital currency (\u2018CBDC\u2019) project in your jurisdiction? If so, what is the status of the project?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. Panama has no central bank and no monetary policy of its own. Panama is a dollarized nation. It has used the US dollar as a legal tender since 1904. Without a central bank or an independent currency, there is no institutional sponsor or policy rationale for a CBDC, and to our knowledge no CBDC project has been announced by the government, Banco Nacional de Panam\u00e1 or the SBP.<\/p>\n<p>Dollar-denominated stablecoins play much of the role a CBDC might otherwise play. They are used for remittances, cross-border settlement and payroll, and are among the assets the Panama City municipality accepts, always converted into dollars before receipt. Neither crypto-assets nor stablecoins are legal tender, and no one is obliged to accept them unless they agree to do so.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current approach in your jurisdiction to the treatment of cryptoassets and decentralised finance (\u2018DeFi\u2019) for the purposes of financial regulation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama currently takes an activity-based approach to crypto-assets and decentralized finance \u201cDeFi\u201d. There is no dedicated Virtual Asset Service Provider \u201cVASP\u201d licence or DeFi-specific regulatory regime in force, and there is no formal rule that distinguishes decentralized platforms from centralized platforms as a separate regulatory category. As a result, crypto and DeFi projects may generally operate lawfully in Panama where their activities are not expressly prohibited and do not fall within an existing regulated perimeter.<\/p>\n<p>This position is, as mentioned before supported by Article 18 of the Panamanian Constitution, under which private persons are only responsible for violations of the Constitution or the law, while public officials are also responsible for exceeding or omitting their legal functions.<\/p>\n<p>In practice, the regulatory analysis focuses on what the platform actually does. The Superintendency of the Securities Market \u201cSMV\u201d looks at whether the activity involves securities, financial instruments, public offerings, brokerage, investment advice, custody, intermediation, portfolio management or market infrastructure. In the DeFi context, the most relevant factors are usually custody, control and intermediation. A non-custodial interface that allows users to interact directly with smart contracts is generally more defensible than a platform that holds client assets, manages positions, routes orders, acts as counterparty or gives investment advice. The SMV\u2019s recent non-custodial platform analysis is consistent with this approach, confirming that where a platform facilitates interaction with crypto-assets that are not securities or financial instruments and does not provide regulated intermediation, advice or custody, it should fall outside the SMV\u2019s licensing perimeter.<\/p>\n<p>Accordingly, DeFi is not prohibited in Panama, but decentralization is not, by itself, a safe harbor. If an identifiable Panamanian entity controls the front end, smart-contract permissions, treasury, fees, admin keys, strategy parameters or user relationship, that role must be analyzed carefully under existing securities, banking, remittance, fiduciary, gambling, anti-money laundering and consumer-protection rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current approach in your jurisdiction to the treatment of cryptoassets and DeFi for the purposes of anti-money laundering and sanctions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>AML\/CFT\/CPF<\/em><\/p>\n<p>Law 23 of 27 April 2015 (the AML Law) is Panama\u2019s cornerstone for AML\/CFT\/CPF. It is regulated by Executive Decree 35 of 2022 and supplemented by resolutions and different guidance issued by each supervisory authority. It is important to point out that the AML\/CFT Law only applies to a specific set of obligated subjects that are numbered in an exhaustive list. These are divided into two main groups:<\/p>\n<ul>\n<li>Financial obligated subjects, which include banks, trusts, financial and leasing companies, card issuers and processors, issuers of payment methods and electronic money, remittance companies and exchange houses (supervised by the SBP); brokerage houses, investment managers, investment advisers and other securities market participants (supervised by the SMV); insurance and reinsurance market participants; and savings and credit co-operatives.<\/li>\n<li>Non-financial obligated subjects, which include free zone companies, casinos and online gaming operators, real estate agents and developers, construction companies, dealers in precious metals and stones, car dealers, pawn shops, notaries, and lawyers and accountants when they carry out specific activities for clients, including acting as resident agents of Panamanian legal entities. These are supervised by the SSNF.<\/li>\n<\/ul>\n<p>The AML\/CFT Law limits the scope of applicability to those activities expressly stated in the law. As crypto-related activities are not in the above categories, a crypto business, VASP or DeFi project would technically not be considered an obliged subject or reporting entity for AML purposes.\u00a0 Therefore, a Panamanian entity conducting crypto-related activities, including through non-custodial or DeFi structures, is not required to register with a Panamanian AML authority.<\/p>\n<p>Having this in mind, a Panamanian entity dealing with crypto assets or DeFi protocols, currently only has the alternative to indirectly report to Panama\u2019s FIU through obligated subjects, for instance through the entity\u2019s resident agent.<\/p>\n<p><em>Sanctions<\/em><\/p>\n<p>Panama\u2019s sanctions regime is established under Title VI of the AML Law, alongside the Executive Decree 587 of 4 August 2015, and several resolutions issued by the National Commission against Money Laundering, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction (CNBC). It operates on two tiers:<\/p>\n<ul>\n<li>Restrictive lists: only the United Nations Security Council consolidated sanctions lists (under Resolutions 1267, 1988, 1373, 1718, 1737 and their successors), and any list established by law, are legally binding.<\/li>\n<li>Control lists: other lists, including the lists of the US Office of Foreign Assets Control (OFAC), the EU consolidated list, the UK consolidated list of financial sanctions targets, Canadian lists, the FATF high-risk jurisdictions list and the Basel AML Index, are not adopted by law. Under Guide I-REG-002-18 of 4 October 2018 they serve as risk-assessment tools, requiring obligated subjects to apply risk-based and enhanced due diligence measures.<\/li>\n<\/ul>\n<p>Sanctions screening obligations are attached to whether or not the entity is an obligated subject under the AML Law. Simiar to our previous conclusion, because crypto activities, including those carry out through DeFi structures are not obligated subjects, they would fall outside the sanction&#8217;s framework.<\/p>\n<p><em>In Practice <\/em><\/p>\n<p>In practice, most crypto businesses, including VASPs and DeFi front-end or UI operators, adopt compliance measures for AML purposes. This can include restricted jurisdictions though limitation of access via terms of use and technical geo-blocking; narrowing down eligibility criteria by restricting persons that can access the protocols or business e.g., sanctioned persons; use of wallet screenings and blockchain analytics to detect sanctioned wallets, risks levels and red flag alerts; and know-your-customer (KYC) checks for users, investors and third party services providers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current approach in your jurisdiction to the treatment of cryptoassets and DeFi for the purposes of taxation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>Panama\u2019s crypto tax perspective<\/em><\/p>\n<p>Panama\u2019s position on tax treatment of digital assets and DeFi can be summarized as follows:<\/p>\n<ul>\n<li>There is no specific law addressing the taxation of digital assets in Panama. As of the date of this article, the Fiscal Code contain no provisions on cryptocurrencies, digital assets or stablecoins.<\/li>\n<li>The tax authority (DGI) has not issued any official statement or guidelines on the characterisation of digital assets, and there is no specific treatment of crypto gains, yield, liquidity provision, staking rewards, swaps or airdrops.<\/li>\n<li>Crypto-related income therefore follows the same parameters as any other income, including the territoriality principle and the economic substance regime, when applicable.<\/li>\n<\/ul>\n<p><em>The territoriality principle<\/em><\/p>\n<p>Under Panama&#8217;s territorial tax system (based on Article 694 of the Fiscal Code), only income from sources within the territory of Panama is subject to income tax, wherever it is received. Income is Panama-source when it arises from activities carried out, used or producing an economic benefit within Panama. In this sense, a foreign legal entity operating exclusively outside Panama is not subject to corporate income tax in Panama, provided that: (a) All income is derived from foreign sources; (b) all commercial operations done to produced such income occur outside Panama; (c) no customers or users are located within Panamanian territory; (d) no Panamanian-source income is generated; (e) no economic substance requirements are applicable.<\/p>\n<p>When it comes to digital assets and DeFi applications and protocols, we would have to analyze whether the users, investors, counterparties are based out of Panama, or are non-Panamanian tax residents; whether the activity produces no direct economic effect in Panama; how much the operations to produce income are linked to Panama; whether the transaction is perfected or consummated abroad; technical information related to IP addresses, acceptance logs for terms of use, geo-blocking and accessibility.<\/p>\n<p><em>New Economic substance<\/em><\/p>\n<p>Law 526 of 28 May 2026 introduced an economic substance regime into the Fiscal Code (Articles 707-A to 707-L), regulated by Executive Decree 32 of 2 September 2026. It does not replace the territoriality principle. It applies to entities incorporated or domiciled in Panama, that form part of a multinational group (two or more entities linked by ownership or control and resident in different jurisdictions) and earn foreign-source passive income: dividends, interest, royalties, capital gains, real estate capital income and other income from movable capital.<\/p>\n<p>Such entities must demonstrate qualified, remunerated personnel and adequate premises in Panama, minds and management decision-making and risk assumption in Panama (the decree requires at least two board meetings held physically in Panama), and adequate operating expenses. Core activities may be outsourced only to service providers in Panama, and strategic decisions cannot be outsourced. Supporting records must be kept in Panama for five years. Entities that fail to comply are treated as non-qualified and taxed, exceptionally, at 15% on net foreign-source passive income, with a limited credit for foreign tax paid on the same income. A simplified regime applies to pure holding entities, and income from qualifying intangibles (patents, utility models, registered industrial designs and copyright-protected software, but not trademarks) receives proportional relief under a nexus approach. The regime applies to fiscal periods beginning on or after 1 January 2027, so the first affected returns are due in 2028.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the current approach in your jurisdiction to retail and wholesale tokenisation projects?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Panama, there is no specific tokenization regime, and tokenized securities have not been specifically established under the securities market law. There is, however, an existing regime that covers securities, financial instruments and capital markets activities, hence it is very important to always look at the underlying asset and rights. \u00a0The securities market legislation and regulators follow a substance-based approach, whereby if a security is represented in a digital or tokenized way it does not per se change the legal nature of the underlying asset.<\/p>\n<p>There is also no expressed disctinction between retail and wholesale tokenization. That said, the retail and wholesale distinction matters in practice through the offering rules. A public offering of securities to Panama-domiciled persons requires SMV registration. Offers made from Panama only to persons domiciled abroad are not deemed made in Panama under Article 128 of the Securities Market Law, and private offerings to limited numbers of investors or to qualified investors, including through private fund structures, are available. Most tokenisation projects structured in Panama therefore target non-Panamanian users, often institutional or qualified investors, and exclude Panama-domiciled retail.<\/p>\n<p>Within the Securities Market Law, there are two important definition that we must pay attention to: A \u2018security\u2019 (numeral 66) includes bonds, negotiable commercial paper, shares, participation quotas, trust certificates, deposit certificates, warrants and any other instrument the SMV recognizes as a security. A \u2018financial instrument\u2019 (numeral 32) is any instrument that gives rise to a financial asset for one party and a financial liability or equity instrument for another, expressly including derivatives over commodities. A token that confers repayment, equity-like, profit-sharing, participation or governance rights, or rights over an underlying financial asset, may be a security regardless of its digital form.<\/p>\n<p>Recently, under Opinion 01-2026 the SMV confirmed that the \u2018technological mechanism\u2019 or legal wrapper is less relevant than the underlying exposure: a platform or token that grants holders financial rights, equity or liabilities is treated as a securities or financial instruments activity, whatever its form. Economic exposure can be enough even without express participation rights. A reserve-backed token whose price accumulates in line with the performance of an underlying fund, for example, carries a risk of characterisation as a participation quota, and that risk increases where holders have redemption rights. The absence of any promise to repay principal and interest, and of any equity or corporate rights over the reserve assets, reduces but does not remove the risk.<\/p>\n<p>Tokenized securities therefore remain a grey area. The SMV has reserved its authority or competence over tokenized instruments that embody security-like rights, but, as it noted in Opinion 1-2023, it has not yet issued a specific rule (<em>acuerdo<\/em>) establishing a licensing, disclosure, custody, trading or settlement framework for them. Tokenization does not take an instrument outside the securities analysis; it may bring it within the SMV\u2019s potential perimeter while leaving the practical rules unresolved.<\/p>\n<p>Where a token is leaning into a security, the risks are:<\/p>\n<ul>\n<li>Brokerage, where the platform facilitates or routes the acquisition of tokens, particularly through a primary minting mechanism.<\/li>\n<li>Investment advice, where the platform curates, ranks or promotes opportunities, displays return expectations or annual percentage yields, or scores the risk of reserve assets.<\/li>\n<li>Operating a trading system (Article 4(7)), where the platform offers order books, matching engines, a secondary market interface or settlement.<\/li>\n<li>Custody, where the operator has control-like powers over vaults or margin accounts, such as discretionary restrictions on withdrawals or forced liquidations, even if assets sit in smart contracts.<\/li>\n<\/ul>\n<p>The risk is lower where the front end is genuinely non-custodial, non-advisory, non-yield-distributing and non-transactional, where staking, lending and similar functions are accessed through third-party protocols rather than integrated and operated by the platform, and where secondary trading is permissionless and independent. Fees matter too. And whether the product or services are offered or accessible to Panamanians.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any prohibitions on the use or trading of cryptoassets in your jurisdiction? If permitted, is cryptoasset trading common?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are currently no general prohibitions on the use or trading of crypto-assets in Panama. As mentioned, Panama does not have a dedicated Virtual Asset Service Provider \u201cVASP\u201d regime in force, and crypto trading is not prohibited simply because the asset is crypto. Under Article 18 of the Panamanian Constitution, private parties may generally act lawfully where the activity is not prohibited by law.<br \/>\nThat said, crypto trading must still be analyzed by activity.<\/p>\n<p>If the trading involves securities, financial instruments, banking, remittance, custody, investment advice, gambling or another regulated activity, the relevant existing regime may apply. The Superintendency of Banks of Panama, or SBP, has stated that cryptocurrency exchange, investment, purchase, sale and trading are not specifically regulated and fall outside its direct banking supervisory competence, while reminding banks to apply due diligence and risk controls.<\/p>\n<p>Crypto trading is relatively common among the local public, particularly through international exchanges and certain local service providers that allow Panamanian users to buy, sell or hold crypto-assets. There are also local banking and financial-service participants that are offering crypto-related services using the licenses, authorizations and compliance frameworks they already have, rather than under a separate crypto-specific license.<\/p>\n<p>In short, crypto trading is permitted in Panama, but it remains unregulated as crypto trading per se.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent have initial coin offerings (\u2018ICOs\u2019) taken place in your jurisdiction and what has been the attitude of relevant authorities to ICOs? If permissible, what are the key requirements that an entity would need to comply with when launching an ICO?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>ICOs have taken place through Panamanian entities, particularly where the token issuance is aimed at non-Panamanian users or investors. Panama does not have a specific ICO regime or a dedicated VASP license, and the authorities have not adopted a blanket prohibition on ICOs. The regulatory treatment depends on the legal nature of the token and on who is being offered the token.<\/p>\n<p>If the token is a regular crypto-asset and does not represent a security, financial instrument, fund interest, debt claim, equity right or other regulated asset, the issuance should generally fall outside the current regulatory perimeter of the Superintendency of the Securities Market, or SMV. The SMV has previously taken the position that cryptocurrencies are not, as such, securities, money or electronic currency under Panamanian law.<\/p>\n<p>If the token is or may be characterized as a security or financial instrument, the analysis changes. Under Article 128 of the Panamanian Securities Market Law, an offer made to persons domiciled outside Panama is not deemed to be made in Panama, even if made from Panama. Therefore, a Panamanian issuer may be able to conduct an offshore token offering, including of a security-type token, provided the offer is not made or directed to persons domiciled in Panama and no regulated intermediation is conducted from Panama.<\/p>\n<p>By contrast, an offer made to persons domiciled in Panama is deemed to be made in Panama, even if made from abroad. In that case, if the token is a security or financial instrument, the issuer would need to analyze registration, exemption, private placement and licensing requirements under the Panamanian securities framework. The use of online channels must also be controlled, because the SMV may assess whether an internet offering is effectively directed to Panama-domiciled persons.<\/p>\n<p>In practice, the key requirements for an ICO from Panama are clear token characterization, proper corporate approvals, token terms and risk disclosures, AML and sanctions controls, restrictions on Panama-domiciled purchasers were relying on an offshore offering position, and careful separation between issuance and regulated activities such as brokerage, investment advice, custody, market-making or distribution. Panama is permissive for ICOs, but not indifferent to substance: if the token or the offering behaves like a securities offering into Panama, the ordinary securities rules may apply.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any legal or regulatory issues concerning the transfer of title to or the granting of security over cryptoassets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama does not have a crypto-specific regime governing the transfer of title to, or the granting of security over, crypto-assets. The better view is that crypto-assets can be treated as movable intangible assets capable of ownership, transfer and contractual use as collateral, although this has not yet been tested extensively before Panamanian courts.<\/p>\n<p>For a transfer of title, there is generally no public registry, notarization, or filing requirement for ordinary crypto-assets. In practice, title should be supported by the underlying agreement and by the effective transfer of control over the asset, usually through an on-chain transfer, control of the relevant wallet, private keys, or custodian account.<\/p>\n<p>The analysis is different for tokenized real-world assets: transferring the token will not necessarily transfer the underlying asset unless the relevant legal formalities for that asset are also satisfied.<\/p>\n<p>Security over crypto-assets is possible in principle, but there is no dedicated crypto-collateral framework. The most workable approach is usually a contractual pledge or collateral arrangement supported by control mechanics, such as a segregated collateral wallet, third-party custodian, escrow arrangement or multisig structure. The documents should clearly address ownership, control, valuation, margining, enforcement, liquidation, replacement of keys, insolvency, and sanctions of risk.<\/p>\n<p>The main legal uncertainty is enforcement. Panamanian law recognizes traditional pledge concepts over movable assets, but applying those concepts to private keys, wallet control and on-chain assets remains relatively untested. Direct appropriation by the creditor should be treated carefully; enforcement mechanics should be structured contractually and consistently with ordinary secured-creditor principles.<\/p>\n<p>Regulatory issues may also arise if the crypto-asset is itself a security or financial instrument, or if the collateral arrangement involves custody, investment management, brokerage, lending to the public, fiduciary services or another regulated activity. For ordinary crypto-assets, however, the transfer or grant of security is not regulated merely because the asset is crypto.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are smart contracts characterised within your legal framework? Are there any enforceability issues specific to the operation of smart contracts which do not arise in the case of traditional legal contracts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama does not yet have a specific statutory regime for smart contracts. They are not treated as a separate category of contract simply because they are written in code or executed on chain. Instead, they would generally be analyzed under ordinary Panamanian contract law and, where relevant, the rules on electronic documents, electronic signatures and electronic commerce.<\/p>\n<p>In principle, a smart contract should be enforceable if the underlying legal relationship satisfies the usual requirements for a valid contract: consent, lawful object and cause, and sufficient certainty of terms. Panamanian law already recognizes electronic documents and electronic signatures, so the fact that the agreement is formed or evidenced electronically should not, by itself, prevent enforceability.<\/p>\n<p>The main issue is that the code alone may not always answer the legal questions a court would need to resolve. For example, it may be unclear who the parties are, whether they had capacity, what law governs, what disclosures were accepted, whether the user understood the risk, whether the code operated as intended, and who is responsible for bugs, oracle failures, admin-key use or unintended execution.<\/p>\n<p>For that reason, in Panama-law structures, the smart contract is best treated as the execution layer, while the legal terms remain in traditional written documents: terms of use, token terms, governance resolutions, multisig policies, custody or control agreements, service agreements and risk disclosures. The code can automate performance, but the documents should explain the parties\u2019 rights, obligations, remedies, limitations of liability, governing law and dispute forum.<\/p>\n<p>There are no enforceability issues that make smart contracts inherently invalid in Panama. The practical risk is that certain matters cannot be solved by code alone, especially contracts requiring notarization, public registry filings, regulatory approvals, consumer disclosures, asset transfer formalities or compliance checks. In those cases, on-chain execution may evidence or implement the transaction, but it does not replace the legal formalities required under Panamanian law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are Decentralised Autonomous Organisations (\u2018DAOs\u2019) treated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Panama has no DAO-specific legislation, and DAOs are not recognized as legal persons in their own right. In other latitudes, an unincorporated DAO risks being treated as an association without legal personality, whose participants may be exposed to liability under general civil rules. This has been seen with previous US decisions such as <em>Samuels v Lido DAO, CFTC v Ooki DAO and Sarcuni v bZx DAO<\/em>, where DAOs were treated as general partnerships or unincorporated associations with joint and several liability for members.<\/p>\n<p>In the DAO context, Panama has played a role in the corporate structure and governance of DAOs, particularly the use of Panamanian private interest foundations was popular and commonly used as legal \u2018wrapper\u2019 for DAOs. Reasons are many, but we can summarize it as follows: a foundation has its own legal personality and can contract, sue and be sued. It has no shareholders or owners and is administered by the foundation council. With other types of entities such as companies, the duty of the directors is to pursue profit of the shareholders, while foundations can have a specific and tailored purpose. For instance, a private foundation purposes can be drafted around the protocol and its community or for the benefit of it. Foundation regulations can give token-holder governance legal effect, for example by requiring the council to implement on-chain votes within defined limits, and a protector or independent council members can provide oversight. Another thing to keep in mind is that private foundations are still non-profit entities and can only do commercial transactions on a non-habitual basis and in line with its purpose.<\/p>\n<p>In practice, we have seen a shift on the use of DAOs. Governance-token voting is increasingly seen as of limited substance, and many projects are winding down their DAO foundations or replacing them with corporate, equity-first structures with independent directors, in which tokens serve adoption and incentives rather than governance. The question of \u2018sufficient decentralisation\u2019 as a legal theory is still developing and has not been tested in Panama.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any governmental or regulatory enforcement actions concerning blockchain in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Most enforcement actions connected with blockchain or digital assets in Panama, relate with fraud, theft, hacks, money laundering, and other criminal activities. Training and use of tools in crypto tracing, and blockchain analytics has been increasing, but it\u2019s still considered quite limited. There are no major cases of public enforcement directed specifically against blockchain technologies or crypto-related businesses for the fact that it is crypto related. Industry regulators, including gambling, banking, securities, and financials, can make investigations and sanctions when such businesses incur or carry out a regulated activity without the proper license, registrations or authorizations. For this the rely For instance, the securities regulator can intervene for unauthorized investment schemes, securities offering, or intermediation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other generally-applicable laws, case law or regulations that may present issues for the use of blockchain technology (such as privacy and data protection law or insolvency law)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>Data protection<\/em><\/p>\n<p>Law 81 of 2019 and its implementing regulations govern personal data, with ANTAI as the authority that handles complaints. Data subjects have rights of access, rectification, cancellation, opposition and portability. Panama has no \u2018right to be forgotten\u2019 in the sense of the EU General Data Protection Regulation (GDPR), and cancellation is not absolute: retention may be required for legal, contractual, regulatory, tax, accounting, employment, AML or litigation reasons. Immutability creates the obvious tension. Projects should keep personal data off-chain, use hashing or zero-knowledge techniques where verification is needed, and set out clearly in their privacy policies what is recorded on-chain and why. KYC data held by front-end operators and token issuers is fully subject to the law.<\/p>\n<p><em>Insolvency<\/em><\/p>\n<p>There is no special insolvency regime for blockchain or digital-asset businesses unless they are regulated banks, insurers or securities entities. Law 12 of 2016 applies to commercial persons with a domicile, branch, agency or establishment in Panama and provides for reorganization and judicial liquidation. Reorganization stays enforcement and restitution claims, restricts termination or acceleration triggered merely by the reorganization and may suspend enforcement of real and fiduciary guarantees. This is relevant to crypto-collateralized lending. The law includes liability actions against directors, officers and others, precautionary attachments, and cross-border provisions for co-operation with foreign courts and recognition of foreign representatives, which matter for multi-jurisdictional crypto groups. The key practical question is whether user assets form part of the estate. Assets of users of non-custodial protocols should not, but omnibus and custodial arrangements require careful analysis.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other key issues concerning blockchain technology in your jurisdiction that legal practitioners should be aware of?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Several practical issues matter as much as the formal legal framework:<\/p>\n<ul>\n<li>\u2018In or from Panama\u2019 is the key test. Panama\u2019s light-touch position depends on regulated activity not being carried out in or from Panama. Structures should be designed with the nexus factors in mind, namely where decisions are taken, where staff and directors sit, which banking rails are used, and whether marketing or onboarding targets Panama, and many projects geo-block Panamanian users as a precaution.<\/li>\n<li>Banking access. There is no prohibition on banking crypto businesses, but access is selective and case-by-case. For being a financial center, there are only a few local banks that are \u201ccrypto friendly\u201d. Several neobanks, EMIs and banks outside of Panama have been increasing to serve this demand. Banks and providers will look for robust KYC\/AML program, source-of-funds evidence, the business description and volume of transactions as key factors.<\/li>\n<li>Prediction markets and gaming. SMV Opinion 01-2026 settled the securities question, but the gaming question remains open. The JCJ regulates games of luck or chance with wagers or prizes; games of skill are not expressly regulated, and the JCJ has not published a position on prediction markets. Geo-blocking Panama is the common precaution.<\/li>\n<li>Economic substance and CARF. Law 526 of 2026 and Panama\u2019s CARF commitment mean that structures relying on foreign-source passive income, and treasuries held by foundations, need to be reviewed for substance and for future reporting obligations.<\/li>\n<li>Founders\u2019 home jurisdictions. A Panamanian structure does not insulate founders from their home-country rules. Controlled foreign corporation regimes, place of effective management tests and, for US persons, effectively connected income can attribute offshore profits to founders or to onshore entities. Development companies, intercompany services agreements and IP allocation should be designed with this in mind, together with foreign counsel.<\/li>\n<li>Legislative panorama. Several VASP and crypto law proposals are in circulation and a FATF evaluation expected in 2027, some form of VASP regime is likely in the coming years. Banking and securities updates concerning distributed ledger technologies, tokenized securities and stablecoins may be coming as well.<\/li>\n<li>Governance quality. Independent directors, documented multisig arrangements and properly minuted decisions are increasingly expected by counterparties, banks and investors. Nominee-only governance is becoming a liability rather than an asset.<\/li>\n<\/ul>\n<p>Overall, Panama offers a stable, low-cost and solid environment in which a wide range of crypto business models can be built and operated.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6636<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/151934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=151934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}