Panama City Accepts Cryptocurrencies for Public Services

Panama City has approved the acceptance of cryptocurrencies for public services, including taxes and permits. Major cryptocurrencies such as Bitcoin and Ethereum will be initially accepted, alongside stablecoins like USDC and USDT. This move is part of a broader regulatory framework aimed at formally integrating digital currencies into the economy, while ensuring compliance with financial regulations.

Panama City’s council has approved the acceptance of cryptocurrency payments for various public services, including taxes, fees, tickets, and permits. This progressive initiative, announced on April 16, represents a critical advancement in Panama’s commitment to integrating digital currencies, notably Bitcoin (BTC), Ethereum (ETH), and stablecoins like USD Coin (USDC) and Tether (USDT).

Previously, attempts to pass similar legislation faced challenges in the Senate, but the city identified a creative means to circumvent the need for new laws. Mayor Mayer Mizrachi Matalon stated that public entities are mandated to accept funds in US dollars. However, through collaboration with a local bank, the city will process cryptocurrency transactions by converting them into dollars in real-time, ensuring legal compliance and facilitating cryptocurrency usage within the economy.

This development coincides with a proposed regulatory framework for cryptocurrencies introduced by the Panamanian government earlier this year. The draft legislation seeks to provide regulatory measures for digital assets and establish a legal basis for blockchain services, affirming Panama’s status as a frontrunner in fintech innovation across Latin America.

The regulatory framework not only legitimises Bitcoin and Ethereum for public transactions but also mandates licensing for Virtual Asset Service Providers (VASPs), such as exchanges and wallets. It enforces strict adherence to anti-money laundering (AML) and Know-Your-Customer (KYC) regulations, ensuring a safe and regulated environment for digital transactions.