Blockchain and Cryptocurrencies in Panama

Introduction

Panama is emerging as a significant player in the global cryptocurrency and blockchain landscape. With its flexible regulatory environment, strategic geographic position, and growing infrastructure, the country is attracting crypto enthusiasts, investors, and digital nomads. This article explores Panama's evolving relationship with blockchain technology and cryptocurrencies, highlighting its regulatory framework, adoption trends, and potential to become a leading fintech hub in Latin America.

Regulatory Landscape

Panama currently lacks specific regulations for blockchain and cryptocurrencies, but its financial authorities have provided non-binding guidance. In 2018, the Superintendence of Banks (SBP) stated that cryptocurrencies fall outside its jurisdiction, and no financial institutions have sought authorization to engage with them. Similarly, the Superintendence of the Securities Market (SMV) clarified that cryptocurrencies are neither securities nor legal currencies, meaning activities like cryptocurrency exchanges are not considered FOREX operations and do not require licenses.

A draft bill, known as Bill 697 or the "Crypto Law," was introduced in April 2022 to regulate cryptocurrencies and their transactions, including licensing requirements for Cryptocurrency Exchange Houses under the Ministry of Commerce. However, President Laurentino Cortizo partially vetoed this bill in June 2022, citing concerns over its alignment with anti-money laundering (AML) standards.

Panama’s monetary system, which uses the US dollar as legal tender alongside the Balboa, supports a flexible financial environment. The absence of a central bank and capital controls facilitates the free flow of funds, making Panama attractive for crypto-related activities.

Adoption and Infrastructure

Panama is witnessing growing adoption of cryptocurrencies, particularly in Panama City. In April 2025, Mayor Mayer Mizrachi announced that the city would accept Bitcoin (BTC), Ethereum (ETH), USDT, and USDC for municipal tax payments in partnership with Towerbank, a crypto-friendly bank. This initiative, launched during Panama Blockchain Week, allows taxpayers to pay in crypto while the municipality receives dollars, bypassing the need for new legislation. Towerbank’s Visa card for cryptocurrency payments, introduced in July 2022, further supports this trend.

Panama’s blockchain ecosystem is bolstered by events like Panama Blockchain Week and international conferences, which foster networking and innovation.

The rise of crypto tourism is another key development. Panama’s permissive stance, combined with its territorial tax system and lack of capital gains tax on crypto transactions, attracts high-net-worth individuals, entrepreneurs, and digital nomads. The Friendly Nations Visa program enhances Panama’s appeal for crypto nomads seeking residency. Businesses, including hotels, cafes, and tour operators, increasingly accept cryptocurrencies, while crypto ATMs and blockchain startups are expanding the infrastructure. Real estate transactions using Bitcoin and smart contracts are also gaining traction, particularly in areas like Casco Viejo and Bocas del Toro.

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Future Outlook

Panama’s Bitcoin Strategy, as articulated by figures like Mayor Mizrachi and Congressman Solís, aims to position the country as a bridge between traditional finance and cryptocurrencies. Proposals to allow cryptocurrency payments for significant transactions, such as Panama Canal transit fees, underscore this ambition. The growing involvement of fintechs, crypto exchanges, and local talent in blockchain projects suggests a vibrant future.

Panama’s strategic position as a financial hub, coupled with its crypto-friendly initiatives, positions it to compete with pioneers like El Salvador. For Panama to become a leading fintech jurisdiction, the approval of a balanced regulatory framework is critical. The proposed legislation, if enacted, could provide legal clarity, enhance consumer protections, and attract foreign investment. Additionally, the rise of crypto tourism and blockchain-based real estate transactions signals Panama’s potential to integrate digital assets into everyday life.

Conclusion

Panama is carving out a niche as a crypto-friendly destination in Latin America. Its permissive regulatory environment, strategic initiatives like the Towerbank partnership, and appeal to crypto tourists position it as a hub for blockchain innovation. While regulatory challenges remain, ongoing efforts to formalize cryptocurrency use and integrate blockchain technology into public and private sectors suggest a bright future. As Panama continues to align its financial ecosystem with global digital trends, it stands poised to become a leader in the region’s cryptocurrency and blockchain landscape.