The State of Crypto Adoption in Panama
Source: Envato
In 2025, the crypto market in Panama is expected to be worth $14.5 million, though this is quite small compared to the United States, which leads globally with $16.1 billion.
Interestingly, Panama’s market is predicted to increase by 3.87% to a value of $15.1 million by 2026. The average revenue spent on cryptocurrencies per user is expected to be roughly US$55.50.
Adoption is expanding steadily. By 2026, it is estimated that over 269,000 people in Panama will be using cryptocurrencies. This growth is fueled by Panama’s strategic position as a financial hub and the increasing willingness of local businesses and banks to integrate Web3 solutions.
The supportive environment of Panama could help make cryptocurrencies more common in Panama’s everyday business activities, even though the market is currently showing a slight decline in value.
Crypto Law In Panama
Source: Envato
The legal landscape for cryptocurrency in Panama shifted significantly in 2025.
From Bill 697 to Bill 247 Previously, the National Assembly passed Bill No. 697 in 2022. However, this bill was partially vetoed by President Laurentino Cortizo due to concerns regarding Anti-Money Laundering (AML) compliance and was later declared inapplicable by the Supreme Court.
The New Framework: Bill No. 247 In 2025, lawmakers introduced Bill No. 247. This new proposal is designed to address previous gaps by strictly aligning with the Financial Action Task Force (FATF) recommendations.
Key aspects of the 2025 legislative proposal include:
- Legal Recognition: It recognizes Bitcoin, Ethereum, and stablecoins as valid payment methods when agreed upon by both parties, upholding the constitutional principle of monetary freedom.
- VASP Licensing: It proposes mandatory registration and licensing for Virtual Asset Service Providers (VASPs) with the Financial Analysis Unit (UAF).
- Compliance: The bill mandates strict Know-Your-Customer (KYC) and AML protocols to prevent illicit activities.
- Governance: It establishes a National Council for Digital Assets to oversee the sector.
As of November 2025, the bill is under discussion in the National Assembly, meaning the sector operates under general commercial laws while awaiting this specific regulation.
Crypto Taxation In Panama
Panama is considered one of the most attractive jurisdictions for crypto investors due to its territorial tax system.
- Foreign-Sourced Income: Panama only taxes income generated within its physical borders. Therefore, capital gains and revenue derived from international crypto trading or foreign-sourced token sales are generally tax-exempt.
- Local Corporate Tax: If a business generates income from activities effectively connected to Panama (Panama-sourced income), that specific income is subject to the standard 25% corporate tax rate.
- VAT/ITBMS: Cryptocurrency transactions are typically exempt from Value Added Tax (ITBMS), reducing transaction costs for users.
Businesses must maintain detailed records of transactions to distinguish between local and foreign-sourced income for accurate tax reporting.
How to Get a Panama Crypto License
While Bill No. 247 proposes a specific VASP license, currently, businesses enter the market by registering as a standard corporation (Sociedad Anónima) and adhering to AML regulations.
Here are the practical steps to operating a crypto business in Panama in 2025:
Business Setup
First, you need to set up your business in Panama. This typically involves choosing the right legal structure, such as a Limited Liability Company (S.R.L.) or a Joint Stock Company (S.A.). You’ll need to prepare and file the necessary documents, like the memorandum of association and company statutes.
Tax Registration
After establishing your company, you’ll need to register with the Panama Tax Authority to get a unique tax identification number (RUC). This allows you to operate your business and fulfill your tax obligations.
Open a Bank Account
To conduct financial transactions, you’ll need to open a corporate bank account in Panama. This process can be complex and may require extensive documentation about your company and its owners.
While historically difficult, banks like Towerbank and Credicorp Bank have become more “crypto-friendly,” facilitating accounts for Web3 businesses.
Comply with Regulations
Even without the final passage of Bill 247, you are expected to implement AML and KYC protocols aligned with FATF standards in your company to ensure they are ready for the incoming regulatory regime.
Apply for the License
Finally, you’ll need to apply for a cryptocurrency license with the relevant Panamanian regulatory authority. This involves submitting a complete set of documents and information about your business
Once Bill No. 247 is enacted, VASPs will need to formally register with the designated regulator and pay an initial license fee (proposed at roughly 1,500 Balboas).
Cryptocurrency Usage in Different Sectors
Cryptocurrency usage in Panama is growing across various sectors. Here are some examples:
Financial Services
Panama is known for its robust financial services sector. Cryptocurrencies are being integrated into financial services, with companies offering crypto wallets, exchanges, and other related services. For instance, Panacrypto is a platform that provides various crypto services and ensures compliance with local regulations.
Real Estate
Cryptocurrencies are also being used in the real estate sector. Some real estate companies in Panama accept cryptocurrency payments for property transactions. This allows for more flexible and international transactions, attracting foreign investors who prefer using digital currencies.
Government Services
The proposed Bill No. 247 envisions using blockchain for governance and public administration, including digital identity systems, tokenized securities, and property registry improvements to reduce bureaucracy and increase transparency.
This move aims to modernize the country’s financial infrastructure and promote the use of digital assets.
Challenges to Crypto Adoption in Panama
While cryptocurrency adoption in Panama is on the rise, several challenges hinder its widespread acceptance:
Regulatory Transition
The primary challenge is the gap between the vetoed Bill 697 and the pending enactment of Bill 247. This creates a temporary period where specific rules for VASPs are not yet fully codified, requiring businesses to use cryptocurrencies and operate with caution.
Compliance Pressure
To avoid returning to international “grey lists,” Panama is under pressure to ensure its crypto sector is fully compliant with FATF Recommendations 15 and 16. This means businesses face high standards for reporting and transparency even before the law is final.
Anti-Money Laundering (AML) and Know-Your-Customer (KYC) Compliance
Cryptocurrency businesses in Panama must navigate stringent AML and KYC regulations. While these regulations are designed to prevent illicit activities, they can be complex and burdensome for companies to implement, especially those that are new to the crypto space.
Market Instability and Fraud
The absence of specific crypto regulations can make the market vulnerable to fraudulent schemes and market instability. This can deter potential investors and users who are concerned about the security and reliability of cryptocurrency transactions.
Potential Benefits of Crypto Adoption in Panama
The adoption of cryptocurrencies in Panama could bring several potential benefits to the country:
Attracting Foreign Investment
Panama’s favorable tax laws and strategic location make it an attractive destination for international investors. By embracing cryptocurrencies, Panama can further enhance its appeal to foreign investors and tech companies looking for a crypto-friendly environment.
Promoting Innovation
Cryptocurrencies and blockchain technology can drive innovation in various sectors, including finance, healthcare, and supply chain management. This can lead to the development of new business models and solutions.
Strengthening International Trade
Cryptocurrencies can facilitate cross-border transactions, reducing the need for intermediaries and lowering transaction fees. This can enhance international trade and economic cooperation.
Conclusion
Panama is aggressively moving to formalize its status as a leading crypto jurisdiction in 2025. With Bill No. 247 aiming to provide legal certainty and banks like Towerbank opening their doors to the industry, the country is maturing past its initial experimental phase.
For investors and entrepreneurs, Panama offers a rare combination: a strategic geographic location, a dollarized economy, and a tax regime that heavily favors international digital business. As regulations finalize, Panama is set to become a primary destination for the global crypto economy.
