PANAMA Law and Practice Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
deed, endorsement, assignment, registration, or other formality. Crypto-assets can be used as collateral in Panama, but the arrangement must be carefully documented because there is no dedicated digital-asset security regime. The traditional civil-law tool is the pledge. Under Article 1548 of the Civil Code, a pledge or mortgage must secure a principal obligation, the pledged or mortgaged asset must belong to the grantor, and the grantor must have authority to dispose of it. Article 1554 requires delivery of possession of the pledged asset to the creditor or to an agreed third party, and Article 1555 allows movable assets in commerce to be pledged if they are susceptible to possession. For crypto-assets, the unresolved question is what “possession” means. The most defensible practical answer is control: transfer to a collateral wallet, a third-party custodian, an escrow wallet, or a multi- signature wallet with agreed signing thresholds. This has not yet been tested in reported Panamanian litiga- tion, so the documents should be very clear on who controls the wallet, who can move the assets, when liquidation is allowed, how valuation is calculated, and what happens if keys are lost or compromised. Panama also has a modern movable security frame- work under Law 129 of 2013, which regulates the movable asset mortgage. The law defines this as a real right over movable assets or rights. It allows security to be created over specific movable assets, generic categories of movable assets, or all present or future movable assets of a person, including corporeal or incorporeal assets with determined or determina- ble value. This may be useful by analogy for cryp- to-assets, but there may be practical registry issues because the system was not designed specifically for native crypto-assets. A creditor should also avoid simple appropriation of the collateral. Under Article 1549, pledged or mort- gaged assets may be sold to satisfy the debt once the principal obligation is due, and Article 1550 states that the creditor may not appropriate or freely dis- pose of the pledged or mortgaged assets. For crypto-
collateral, liquidation mechanics should therefore be drafted as enforcement or sale procedures, not as an unrestricted right for the creditor to take the assets. 1.2.2 Access to Banking There is no Panama-specific rule that prohibits cryp- to-asset businesses from using banks, payment pro- cessors, neobanks, or other payment partners simply because they are crypto-related. The issue is mainly practical and risk-based, not a formal statutory ban. Panama does not yet have a dedicated Virtual Asset Service Provider, or VASP, regime. The SBP has stat- ed that activities involving the exchange, investment, purchase, sale or commercialisation of cryptocurren- cies are not specifically regulated in Panama and fall outside its direct supervisory scope, while reminding regulated banks to apply due diligence and risk con- trols to prevent misuse of their services. Market practice has also become more open. Some local banks have started accepting crypto-related clients and offering crypto-adjacent services. Tower- bank, for example, publicly markets crypto-friendly banking services, including crypto-to-dollar and dol- lar-to-crypto conversions, debit card use, and dollar loans collateralised by Bitcoin. In addition, Caja de Ahorros, a state-owned Panamanian bank, has pub- licly confirmed plans to enter the Bitcoin space by allowing accounts connected to Bitcoin activity and dollar transactions. However, the precise mechanics and launch conditions should be verified once for- mally implemented. At present, there is no separate crypto-specific bank- ing licence or additional authorisation in Panama simply because a bank or payment partner services crypto-related clients or supports fiat off-ramping. The relevant question is whether the partner is already properly authorised for its underlying activity, such as banking, remittance, payment processing, acquiring, custody, foreign exchange, securities, or investment services. A Panamanian bank remains regulated by the SBP, and a money remittance business must be authorised under the applicable remittance rules.
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