Panama bank CEO issues cryptocurrency warning

The head of government-owned Banco Nacional de Panamá warned there are no regulations in the country covering investments in cryptocurrencies.

Rolando de León advised people to steer clear of them, Spanish news agency Efe reported.

"Today there is sense of novelty and fascination surrounding cryptocurrencies but I wouldn't recommend them to anyone," he was quoted as saying. "In Panama there are no parameters concerning responsibility; it's better that we wait a while."

De León was reported as saying that associated regulations needed drawing up, adding that he would investigate who was behind a local cryptocurrency promotional campaign.

In related news, Efe reported that the bank posted net income of US$160mn for last year, up 28.5% on 2016.

In December Guatemalan central bank governor Sergio Recinos added to the growing chorus of warnings across Latin America over cryptocurrencies, stressing that virtual currencies are not legal tender in the country.

Recinos pointed to the use of virtual currencies in illegal activities.

"Due to their anonymity, cryptocurrencies can easily be used for illicit activities – money laundering, terrorism, drug purchases, tax evasion, among others – in proportions that could even be higher than cash," he said at the time. "It also has an anonymous origin and operates outside the regulatory framework. They are exposed to cyber attacks or hacking, which could lead to irreversible loss for the user."

Also in December, the governor of Brazil's central bank, Ilan Goldfajn, slammed Bitcoin as a "typical bubble, the typical pyramid," while Mexico's central bank, bank regulator and finance ministry issued a joint statement on the growing use of ICOs (initial coin offerings) and "tokens" as a fundraising tool, giving rise to a highly volatile, unregulated method of funding – a serious risk for investors.

Last month, Ecuador's central bank reminded Ecuadorans that buying and selling cryptocurrencies is not illegal. However, it said bitcoin is not an authorized payment instrument in Ecuador. It did not cite other types of cryptocurrency.