License for Crypto in Panama – Overview
The current Panamanian administration has taken more of a hands-off approach when it comes to crypto companies. Still, there are laws in place that are relevant to all companies, including the crypto ones. Law 129 of 2020, for example, is an important statue that promotes transparency and accountability. The main governing bodies tasked with issuing and overseeing cryptocurrency licenses are:

Superintendency of Banks of Panama (SBP): Handing out permits and overseeing cryptocurrency-adjacent enterprises are primarily the purview of this regulatory body. The SBP makes sure accredited firms are open and follow all financial rules;
Financial Analysis Unit (UAF):. The UAF is vital in keeping an eye on and making sure that AML/CFT rules are followed. To combat monetary laundering practices and the financing for terrorist organizations, it monitors the reporting of questionable financial transactions;
Ministry of Commerce and Industries: More precisely, the General Directorate of Electronic Commerce within this ministry is involved in distributing licenses for cryptocurrency exchanger houses;
National Securities Commission (CNV): Any market for securities, including digital funds, is subject to regulation by this governing body. The compliance of crypto-related securities with applicable laws and regulations is what the CNV looks into.
The company’s operations must all be conducted in a proper fashion and in line with the norms and laws imposed by the authorities mentioned above in order to successfully secure a Panama crypto permit.

As the digital currency market expanded and even the most relaxed states tightened their stipulations, Panama became one of the top spots for those who seek to establish a cryptocurrency business from the ground up. An increasing number of startups have settled on this Latin American country as their base of operations due to its low crypto license fees and its relative ease of setting up.

In particular, crypto casinos and GameFi ventures that are looking to hit the ground running stand to benefit from Panama’s gaming license in conjunction with its VASP permit.

Earning a license in Panama can be a breeze. There are no strong requirements when it comes to setting up a local office or appointing a local director or depositing a specific share capital. To prevent major repercussions, it is imperative to remain in complete compliance with the FATF Recommendations on AML-CFT and KYC. If you run a cryptocurrency business in the country, Rengang can help you safeguard it legally by creating a unique suite of documentation, rules, guidelines, and forms.

How and how long is it to get a Panama crypto license?
To establish a legal entity for a VASP in 2024 as quickly as possible, the best option is to incorporate a crypto business in Panama. Starting with a basic setup including a corporate account and a comprehensive set of legal policies and documentation, the whole procedure may take anywhere from one business week to approximately six to seven weeks.

There are, in essence, three stages to the whole process:

Getting the necessary legal documents in order to conduct crypto activity in a suitable fashion;
Forming the company and structuring it; and
Opening corporate bank accounts (if applicable).
Crypto firms are not required to have economic substance in Panama. A local director, compliance officer, and office space are not required.

Legal documentation such as corporate policies, compliance standards, public legal disclaimers, etc., must be drafted in order for a licensed Panama firm to be properly formed. Although not required, such paperwork safeguards all parties involved against illegal activities and provides essential standards for the legitimate running of a specific endeavor.

Notably, this helps in demonstrating that the firm takes its operations seriously, which is essential for projects that want to set up a bank account.

What kinds of cryptocurrency activities are allowed in Panama with a crypto license?
There are primarily two types of licenses for cryptocurrency-related activities:

Exchange Authorization: Any company planning to run an exchanger service for virtual currencies needs this authorization. Legal entities seeking such permits must first register with the Panamanian state as Specialized Financial Institutions (SFIs);
Wallet Service Authorization: Companies offering digital currency wallet services are qualified to obtain this sort of permit.
It must be noted that both company types require the same standard crypto license. It allows them to partake in a host of operations pertaining to digital currencies.

This jurisdiction’s gambling license is the backbone of the most popular business model in the country, which is suitable for GameFi initiatives, web3 games, and crypto casinos. Panama is an ideal setting for lucrative endeavors like this to thrive and build momentum with little effort.

More and more decentralized initiatives are selecting this Republic as their center of operations. This includes DeFi protocols, decentralized exchange platforms without on-ramping services, decentralized autonomous organizations (DAOs), and NFT issuers.

The lenient legislation in Panama allows for the efficient operation of ICOs, IEOs, ITOs, INOs, and similar projects as well. However, before issuing cryptocurrencies, make sure it doesn’t meet the criteria for a security token. If it does, there might be additional requirements to be met.