Panama City has become the latest capital to greenlight cryptocurrency for public payments, allowing residents to settle taxes, fees, fines, and permits using digital assets like Bitcoin, Ethereum, USDC, and USDT.
The announcement was made by newly elected Mayor Mayer Mizrachi Matalon via X on Wednesday. Unlike previous administrations that required new legislative approval, Mizrachi’s plan sidestepped Senate action by partnering with a local bank that handles crypto-to-dollar conversion in real time.
“Legally public institutions must receive funds in $,” Mizrachi explained.
“So we partner with a bank who will take care of the transaction receiving in crypto and convert on spot to $.”
The U.S. dollar is legal tender in Panama, allowing this approach to operate within existing financial regulations. The move puts Panama City in step with a growing number of jurisdictions—like El Salvador and Lugano—experimenting with digital currencies as tools for modernizing public finance and expanding financial inclusion.
A Step Toward Financial System Innovation
Mayor Mizrachi emphasized that the initiative will help integrate cryptocurrencies into the broader economy and government operations.
“This allows for the free flow of crypto in the entire economy and entire government,” he stated.
The decision aligns with Panama’s ongoing efforts to modernize its financial infrastructure. By enabling crypto payments for public services, the city aims to improve efficiency, transparency, and access to financial tools.
Crypto Use for Public Payments Still Limited
Panama City’s move joins a broader trend of municipalities experimenting with digital assets for government payments. Across the U.S., several cities have taken similar steps—though actual adoption remains limited.
Detroit drew attention in November 2024 by allowing residents to pay taxes and fees through PayPal’s platform. While known for fiat use, PayPal has embraced crypto, launching its own stablecoin (PYUSD) and enabling trading features including Solana (SOL).
At the state level, Colorado began accepting crypto for tax payments in 2022, and North Carolina has proposed similar legislation. But uptake has been modest. A report from Colorado Newsline revealed that in nearly three years, citizens paid only about $57,000 in taxes via crypto—a small fraction of the state’s multi-billion-dollar annual intake.
These early trials suggest that while crypto infrastructure is expanding, real-world usage remains constrained by volatility, complexity, and limited public awareness—challenges Panama City and others may face in scaling decentralized payments.
Quick Facts
- Panama City now accepts BTC, ETH, USDC, and USDT for municipal payments
- A local bank handles crypto-to-USD conversion for compliance
- The initiative supports modernization and fintech innovation
- Panama City joins global leaders in public crypto adoption
