The Supreme Court canceled the attempt to regulate cryptocurrencies

The commercialization and use of cryptocurrencies and virtual assets continues without the protection of local financial legislation, after the Supreme Court of Justice declared unenforceable the draft law that regulated the issue and was approved by the National Assembly.

The verdict of the judges of June 6, 2023 was published in the Official Gazette of August 9, 2023 and was counted as the saving vote of Olmedo Arrocha.

In short, the majority of the Supreme Court accepted the warning that the project is unconstitutional because it is against the provisions of Article 170 of the Political Constitution.

This article stipulates that the draft law to which the executive power has objected in its entirety will be returned to the National Assembly for a third reading, and if only partially, it will be returned for a second reading, solely for the purpose of resolving the objections raised. .

In accordance with this concept, the Court supported the veto of President Laurentin Cortiz and his pronouncement does not refer to the content of the bill that deals with the current issue, such as virtual property.

In the second debate, the representatives not only responded to the objections of the executive authority, but also approved changes to the provisions to which there were no objections, and new ones were added with content that was not part of the originally approved project.

This was enough for the Supreme Court of Panama to support the executive’s position and confirm that the bill is in conflict with the Constitution.’

fifteen

The Executive Board had no objection to the articles of the project.

170

is the number of the article of the Constitution that the proposed law would violate.

Judge Arrocha warns that he opposes the judgment of his colleagues because he does not consider the methodology used adequate, since the project had to be dealt with article by article, and not generally as it happened.

In his writing, Arrocha confirms that the project consists of 15 articles to which the executive authority had no objection, and which essentially contain the purpose of the legal proposal.

“The decision we do not support on this occasion loses sight of the fact that these indisputable articles may have value and meaning in themselves; however, this decision wraps them in the effect of being removed from the national regulatory catalog, leaving consumers with orphaned products that will not cease to exist, even though there is no law recognizing them,” said Arrocha.

The executive power objected, as unenforceable and for material reasons, to articles 34 and 36 of the project; and for formal reasons the entire bill.

Among the reasons presented by the executive power in its comments on the bill sent to the National Assembly, it is stated that the legislative initiative requires “adjustment” to the norms regulating the financial system and the Panamanian monetary model.

The president’s main reasons are that the legal body creates a structure within the National Bank of Panama and assigns functions to its board of directors, which is only the authority of the executive branch.

In Latin America, the legalization of virtual assets is a topical issue. El Salvador has approved its legal use, while Chile already has a law.