Panama’s National Assembly approved broad crypto-assets bill

Panama’s National Assembly approved Bill 697 in its third debate on April 28, 2022, advancing a wide-ranging framework for the commercialization and use of crypto assets. The vote was 38 in favor, none against and two abstentions. Approval by the legislature did not make the proposal law: it still had to be sent to President Laurentino Cortizo for approval or objection.

The development mattered because the proposal extended beyond bitcoin. It addressed crypto payments, digitally issued value, tokenization of precious metals and other property, and payment systems. In a country identified internationally with banking and cross-border financial services, that breadth made the measure a significant institutional test of whether crypto activity could be brought into an explicit statutory framework.

What the Assembly approved

Bill 697 would allow people in Panama and companies established there to agree voluntarily to use crypto assets as payment for civil or commercial transactions not prohibited by Panamanian law. The proposal therefore differed from a compulsory acceptance rule: it provided legal room for counterparties to choose crypto without requiring every merchant or creditor to accept it.

The surviving bill text and the Library of Congress’s legal summary identified bitcoin, ether, XRP, litecoin, XDC Network, Elrond, stellar, IOTA and algorand as expressly contemplated assets, while not limiting permissible use to that list. Those names reflected the proposal as considered in 2022; inclusion did not constitute an official endorsement of any asset or guarantee its value, liquidity or legal treatment outside Panama.

The measure also contemplated mechanisms through which public obligations, including taxes, could be paid using crypto assets. That provision was prospective on April 28: implementation would have required the bill to become law and public authorities to establish the necessary procedures. Reports describing crypto tax payments as already available would therefore overstate the event-day record.

Another part of the proposal directed Panama’s Government Innovation Authority to consider distributed-ledger or blockchain technology for digital identity and public registries. The stated policy objective was greater efficiency and transparency. Approval of that instruction did not establish that a production identity system, government wallet or blockchain registry existed on April 28.

A framework, not legal tender

The distinction between an optional payment framework and legal-tender status was central. Bill 697 sought to give legal recognition to privately agreed crypto transactions, but it did not replace the balboa or the U.S. dollar, compel acceptance of bitcoin, or complete the regulatory work needed for supervised institutions to offer crypto services.

That made Panama’s approach broader by subject matter but less coercive than a legal-tender mandate. It also left practical questions for regulators and banks, including custody, conversion, accounting, consumer protection and compliance with anti-money-laundering controls. Contemporaneous Reuters reporting recorded both the bill’s innovation argument and concerns that expanding crypto use could complicate Panama’s continuing efforts to demonstrate financial transparency.

No defensible asset-price reaction can be attributed to the Assembly vote from the cited records. Crypto assets traded continuously across venues with different liquidity, currencies and daily cutoffs, while the legislative sources provide no event-study methodology. This reconstruction consequently makes no claim about a bitcoin return, market-cap change or trading-volume response on April 28.

What remained unresolved on April 28

The verified event was legislative passage, not enactment. President Cortizo retained authority to sign or object to the measure, and the cited contemporaneous accounts did not establish how implementing regulations would allocate responsibility among Panama’s public institutions.

Later context

Later records must not be read backward into the April 28 decision. Cortizo partially objected to the proposal on June 15, 2022. After further legislative action, Panama’s Supreme Court declared the entire revised Bill 697 constitutionally invalid on June 6, 2023 because the Assembly had not followed the required lawmaking procedure. The court’s later ruling confirms that the April 28 vote never produced a durable enacted crypto regime.