PANAMA Trends and Developments Contributed by: Teresa Carballo and Edgar Young, Pacifica Legal
may issue, sell, distribute, or airdrop tokens, and oper- ate services such as decentralised exchanges, lend- ing protocols, and perpetual platforms. Panama’s two financial regulators have repeatedly and consistently confirmed this position. The Super- intendency of the Securities Market ( Superintendencia del Mercado de Valores , or SMV) and the Superintend- ency of Banks ( Superintendencia de Bancos de Pan- amá , or SBP) have both stated that cryptocurrencies are not securities, financial instruments, legal tender, or electronic money, and therefore fall outside their respective mandates. The SBP said as much in a pub- lic notice as early as 2018, and the SMV has issued a series of opinions to the same effect, discussed fur- ther below. The practical result is a flexible jurisdiction with a pro-crypto approach. The securities regulator ’ s consistent position The reason so many different business models can operate from Panama is that the SMV has, over sev- en years, built a remarkably consistent body of guid- ance. Opinion 7-2018 first confirmed that the SMV lacks supervisory competence over virtual currencies because they are neither securities nor foreign curren- cies. Opinion 1-2023 reaffirmed this, focusing on the statutory definitions of “security” and “money” and clarifying that crypto-assets fall outside both, while also addressing the limited circumstances in which licensed securities houses may touch digital assets. Opinion 5-2023 went further, stating that crypto-assets and crypto derivatives are not within the scope of the regulated activities reserved to investment advisers and brokerage firms. More recent opinions have extended the same logic to specific business models. Opinion 4-2024 addressed whether a licensed brokerage firm could hold, in a domestic investment account, assets other than rec- ognised securities or money, and noted that although the SMV has signalled an intention to regulate deriva- tives, no such regulation has yet been adopted. Opin- ion 4-2025 reviewed a non-custodial platform that allows users to exchange Bitcoin and Ether while retaining control of their own keys, and concluded that, because the operator does not engage in inter- mediation, advice, or fundraising, and because cryp- tocurrencies are not securities or financial instruments,
it requires no licence or registration. The underlying conclusion is as follows: where a project does not deal in securities and does not act as a broker, adviser, or custodian of securities, it falls outside the SMV’s remit, although the regulator itself continues to note that legislative updates would provide the market with greater certainty. Decentralised finance : the largest cluster One of the most active project categories in Panama is decentralised finance, and within it, several subsec- tors stand out. Key questions to consider that deter- mine the regulatory outcome are whether the entity takes custody of, intermediates, or deals in anything that qualifies as a security. Borrowing and lending protocols Borrowing and lending protocols are a mainstay. Because the Banking Law is built around deposit- taking, lending, and payment intermediation by licensed banks, a non-custodial protocol, one that never takes custody of user crypto-assets and simply provides software through which users interact with smart contracts, does not carry out any core banking activity and falls outside the Banking Law. The same reasoning supports yield products, automated strate- gies, and liquid-staking arrangements, provided the operator remains a technology provider rather than a financial intermediary. Perpetuals and derivatives venues Perpetuals and derivatives venues are a fast-growing segment. A representative model is a non-custodial perpetual exchange in which users trade leveraged contracts directly from their own wallets; the entity itself never holds assets, and execution occurs on- chain – eg, via a request-for-quote process with inde- pendent market makers. In our view, such an entity would be more like a technology provider rather than a broker, counterparty or custodian, and because crypto derivatives remain outside any adopted SMV regulation, this activity is currently treated as permis- sible and unlicensed in Panama. Swaps and decentralised exchanges Swaps and decentralised exchanges round out the DeFi picture, and Opinion 4-2025 is directly on point. A non-custodial interface that simply connects users
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