PANAMA IN THE FINTECH REVOLUTION

The Republic of Panama would seem like a logical place for Blockchain Technology and Crypto adaptation to flourish, based on its dollar adapted economy, no central bank, geographic connectivity, source based taxation system, long tradition of financial services and trade, etc., so why hasn't it?

Like a large portion of Latin America, Panama has been slow to embrace these technologies, mainly due to lack of understanding and access. Aside from a few and a very enthusiastic and growing community, largely most Panamanians know little about these decentralized applications and ignore impact that this tech will have on many aspects of their lives in the not so distant future.

The government has also been a spectator, as the country currently has no regulations specific to Crypto, Blockchian or Fintech, but this apparently will start to change soon. In March of 2018, the securities regulator (Superintendencia del Mercado de Valores SMV) issued an important opinion (001-18) regarding crowdfunding. Basically the SMV came to the conclusion that only equity crowdfunding fell under their scope and thus other types of crowd funding did not, such as peer to peer lending, donations, reward, etc. This of course is very relevant to ICOs and what sort of treatment they will receive in the future.

More recently in April 2018, the Ministry of Economy and Finance presented a bill to the legislature to “modernize the financial system”. This law proposal includes regulation specific Cryptocurrency and Fintech. For example the proposed law creates a structure named special financial entities, establishes who the regulator will be, there are some rules for ICOs, etc.

It is uncertain right now if this proposal will became law, but the fact that the government is moving towards legal framework for these technologies is a telling sign that they acknowledge that this tech is here to stay. In my opinion, the law proposal is a mixed bag; frankly I would prefer that this matter be regulated separately and with more participation from the local users. To some it might sound fine to have no regulation at all but this also poses issues and problems related to principle of legal certainty for investors and entrepreneurs.

It will be very interesting and exciting to follow how Fintech adoption will unfold in Panama and Latin America in general going forward. Embracing these useful technologies as soon as possible can be a game true changer, and not only for economic prosperity and efficiency but the impact on the evolution of the democratic system, with transparency being a driving force for the betterment of society.