PANAMA Trends and Developments Contributed by: Kharla Aizpurua Olmos, Roberto Vidal, Miguel Arias and Eduardo Oteiza, Morgan & Morgan
policy and supervision, issue VASP oversight guide - lines and manage integration into the financial system. The bill would require VASPs to register and comply with transparency and financial security requirements, mandating AML controls aligned with the Financial Action Task Force (FATF) recommendations, and would impose additional operational requirements and audits by firms registered with the tax authority and the Superintendency of Banks. It would also regu - late Initial Coin/Token Offerings, requiring registration and approval by the Superintendency of the Securi - ties Market. The CONAD would have to issue special licences to operate within this framework, and non- compliance would result in hefty fines and sanctions. Finally, the bill would introduce a special tax regime for crypto transactions and operators, including tax benefits for blockchain start-ups and an income tax exemption for five years for qualifying blockchain start-ups (subject to conditions), as well as a differ - entiated capital gains tax rate for digital assets based on holding period. 2. Draft Bill 413 of 2025, which aims to regulate the use of artificial intelligence Although AI is not, strictly speaking, a fintech product in itself, the current “AI era” has expanded the range of tools used across the fintech ecosystem, both to streamline operations and, in some cases, to support the creation or management of digital products and services that may eventually fall within the fintech regulatory scope. For that reason, a dedicated legal framework for AI is relevant to fintech, particularly where AI is deployed in consumer‑facing or risk‑sen - sitive contexts. Draft Bill 413 of 2025 seeks to lay the groundwork for the development, implementation and use of AI in Panama, expressly anchored in constitu - tional principles and international commitments, and framed around the protection of human dignity, human rights and human well‑being, while setting limits on its use and implementation by users. To achieve this, the draft bill establishes a series of basic principles on which AI regulation and use should be based, namely general equity, equal opportunity and access by the general public, basic rights pres - ervation, privacy and confidentiality, and prevalence of human intelligence over AI-based results, many of
which are in essence safeguarded by constitutional mandate. On AI implementation, the draft bill provides a risk matrix applicable to all AI systems and software to identify potential vulnerabilities. The bill would require AI developers to register their systems with the Secre - tariat of Science, Technology and Innovation (SENA - CYT), and it would assign this entity a central role by establishing a competent unit for supervision and audit of registered systems, designating it as the AI regulator empowered to issue technical and ethical directives, investigate complaints and impose propor - tionate dissuasive sanctions for any contravention of the law. It would also provide for cross‑sector regula - tion, including of health, finance, transport, education, justice and public administration, and introduce algo - rithm audits and a certification platform to ensure AI systems comply with basic human rights principles. In the financial sector, the bill specifically contem - plates regulating the use of AI in the provision of financial services, including for credit evaluation, fraud detection and investment advisory activities, with an emphasis on transparency, equity and consumer pro - tection, all elements that would be particularly relevant for fintech business models operating in Panama. 3. Draft Bill 326 of 2025, which aims to regulate virtual asset service providers according to AML standards A core policy consideration for any fintech or AI frame - work is preventing the misuse of financial innovation for money laundering and terrorism financing, and ensuring that regulated actors operate under clear, enforceable compliance expectations. That focus is explicit in Draft Bill 326 of 2025, which proposes an integral and mandatory legal regime for the registra - tion, licensing, supervision and control of VASPs oper - ating in or from Panama, expressly under a risk‑based approach and in strict alignment with FATF standards. This draft bill, in connection with Draft Bill 247 dis - cussed above, defines key concepts that are com - monly relevant across digital‑finance business mod - els, including virtual assets, VASPs, blockchain, stablecoins, decentralised finance (DeFi), wallets and transactional monitoring systems. It also sets out
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