TLDR
- Panama City will begin accepting Bitcoin, Ethereum, and stablecoins for taxes and public service payments
- The city partnered with a bank to immediately convert crypto to USD, maintaining legal compliance
- Mayor Mayer Mizrachi Matalon announced the initiative on April 16, calling it a “historic vote”
- This move comes while Panama’s national crypto legislation remains stalled in the Senate
- Panama City joins other global jurisdictions like Colorado, Lugano, and Vancouver that accept or plan to accept crypto for government payments
Panama City has become the latest major municipality to embrace cryptocurrency payments, with the city council approving a measure that will allow residents to pay taxes and public services using digital assets. The announcement made on April 16 by Mayor Mayer Mizrachi Matalon marks a turning point for crypto adoption in the Central American nation.
The capital city will accept Bitcoin (BTC), Ethereum (ETH), and popular stablecoins including USDC and USDT for a wide range of municipal payments. These include taxes, fees, permits, fines, and even bus tickets.
Mayor Mizrachi described the council’s decision as a “historic vote” that would modernize public finance and expand access to decentralized payment options for citizens. The program is expected to be fully implemented later this year.
Prior administrations tried to push a bill in the senate to make this possible, but we found a simple way to do it without new legistlation. Legally public institutions must receive funds in $, so we partner with a bank who will take care of the transaction receiving in cryptoâŚ
— Mayer Mizrachi (@Mayer) April 15, 2025
Banking Partnership Creates Legal Workaround
Panama City’s approach is unique because of how it navigates existing legal restrictions. Under Panamanian law, government agencies must transact exclusively in US dollars, which remains the country’s only legal tender for official transactions.
To overcome this obstacle, the city has partnered with a local banking institution. This bank will instantly convert incoming cryptocurrency payments into US dollars.
This conversion system allows the city to maintain legal compliance while still permitting cryptocurrency usage at the point of payment. The arrangement creates a de facto crypto payment system without requiring approval from Panama’s national legislature.
The city has not yet disclosed which specific payment providers or cryptocurrency wallets will be supported in the program. Officials have stated that further guidance will be released before the full rollout occurs later in 2025.
Panama Joins Global Trend of Municipal Crypto Adoption
Panama City is not alone in its move toward cryptocurrency acceptance. Several municipalities and territories worldwide already accept or are exploring crypto payments for government services.
The US state of Colorado began accepting cryptocurrency payments for taxes in September 2022. Like Panama City, Colorado immediately converts the crypto to fiat currency upon receipt.
Lugano, Switzerland announced in December 2023 that taxes and city fees could be paid in Bitcoin. This development helped earn Lugano a reputation as a globally recognized “Bitcoin city.”
Vancouver, Canada’s city council passed a motion to become a “Bitcoin-friendly city” in December 2024. The Vancouver local government is now exploring ways to integrate Bitcoin into its financial system, including for tax payments.
National Legislation Remains Stalled
Panama City’s announcement comes as the national government continues to debate long-delayed cryptocurrency legislation. First introduced in 2022, the proposed national crypto bill has been revised multiple times and faced repeated obstacles in Panama’s Senate.
The bill would establish a legal framework for blockchain innovation and digital asset use across the entire country. It aims to regulate Virtual Asset Service Providers (VASPs), including exchanges and digital wallets, while enforcing anti-money laundering and know-your-customer rules.
The framework also outlines guidelines for using blockchain in legal and financial services, including tokenized securities, smart contracts, and decentralized platforms.
Panama City’s municipal initiative could potentially influence the national debate. By demonstrating the feasibility of integrating digital assets into existing financial systems without risking legal non-compliance, the capital’s example may put pressure on lawmakers to advance broader crypto adoption.
North Carolina has also recently entered the conversation with legislation titled “The North Carolina Digital Asset Freedom Act,” introduced on April 10. If passed, the bill would recognize cryptocurrencies as an official form of payment that can be used to pay taxes in that state.
The successful implementation of Panama City’s crypto payment system could provide a model for other municipalities in the region looking to modernize their payment systems while working within existing legal frameworks.
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