Panama Supreme Court to rule over the applicability of digital currency legislation

Getting your Trinity Audio player ready...

Panama’s Supreme Court will have to decide whether or not it will agree to the enforceability of a new virtual currency legislation for the country.

An official disclosure confirmed that the country’s executive branch had forwarded the bill to the judiciary to give its ruling. The proposed legislation, termed Bill No. 697, was rejected by Panamanian President Laurentino Cortizo because it impugned certain aspects of the country’s constitution.

“Among the considerations made by the Executive when objecting to the bill submitted to the National Assembly, it is specified that the legislative initiative requires ‘adaptation’ to the norms that regulate the financial system and the Panamanian monetary model,” the official release read.

In particular, the president’s office was against the bill because of articles 34 and 36, which seemingly infringed on the enshrined principles of separation of power.

Since the presentation of the bill, Panama’s legislature and its executive arm of government have been at loggerheads over its content. The first shots were fired in June when President Cortizo hinted that he would not append his signature to a bill over its omission of anti-money laundering (AML) rules.

In addition to ignoring standard AML procedures, President Cortizo’s complaint with the bill involves claims that the legislature proceeded with the bill after his partial veto. Upon submission, President Cortizo vetoed it, but virtual currency enthusiasts are watching with bated breath for the court’s interpretation on the matter.

Based on the wording of the bill, parliamentarians are seeking to rejuvenate Panama’s virtual currency ecosystem in line with other pioneering jurisdictions. If approved, the bill aims to make Panama “compatible with the digital economy, blockchain, crypto assets, and the internet.”

Other sweeping changes following the bill’s introduction will include the unrestricted use of virtual currencies like BTC and Ethereum (ETH) as payment options.

A wave of unpleasant regulatory action for the industry

The virtual currency industry is wading through turbulent times marked by several high-profile implosions, tumbling prices, and a regulatory and legislative crackdown. Policymakers and law enforcement agencies worldwide are now banding together in a valiant attempt to police the virtual currency industry.

In New York, Proof-of-Work miners are facing a two-year moratorium, while Kazakhstan miners are grappling with increased taxation and a hike in electricity supply. In Thailand, virtual currency service providers have seen their advertising powers tamed by regulators, while custody providers have been issued with a new wave of regulations.

Watch: Law & Order: Regulatory Compliance for Blockchain & Digital Assets