Panama City has become the first public institution to accept cryptocurrency for taxes and permits, allowing payments in Bitcoin (BTC), Ethereum (ETH), and stablecoins such as USDC and USDT. This initiative, supported by a partnership with a local bank, enables instant conversions to U.S. dollars, circumventing the need for new legislation. Unlike El Salvador’s approach, Panama City’s model keeps crypto optional, addressing volatility risks while fostering digital currency adoption.
The Panama City council has officially passed a measure allowing cryptocurrency payments for taxes, fees, tickets, and permits. Residents can now use Bitcoin (BTC), Ethereum (ETH), and major stablecoins such as USD Coin (USDC) and Tether (USDT) to settle these obligations. This initiative represents a pioneering effort by a public institution to embrace digital payments in governance.
The announcement was publicly made by Mayor Mayer Mizrachi via social media platform X. This move circumvents a delayed senate bill intended to legalise cryptocurrency payments by implementing a creative solution. The city intends to partner with a local bank, facilitating the transactions while converters handle the cryptocurrencies on the spot to U.S. dollars.
Mayor Mizrachi explained that previous administrations attempted similar campaigns via the senate but faced obstacles. The current administration’s partnership with a bank provides a clear route to ensure compliance as regulations require public institutions to accept USD. This mechanism promotes a seamless integration of cryptocurrencies into the local economy without necessitating legislative changes.
This significant step emphasizes the city’s commitment to integrating digital currencies in governance, allowing crypto payments to be instantly converted to USD. Unlike El Salvador’s approach which adopted Bitcoin as legal tender in 2021 with mixed results, Panama City maintains optional crypto payments and focuses solely on conversions, reducing volatility risks while promoting digital currency usage within the public sector.
