tl;dr
Panama City council approved a plan to accept Bitcoin, Ethereum, and stablecoins like USDC and USDT for payments of taxes, fees, permits, and fines. The city will partner with a local bank to instantly convert crypto payments to US dollars, complying with Panamanian law that requires government tran...
Panama City council has taken a groundbreaking step by approving the acceptance of cryptocurrency payments for taxes, fees, permits, and fines. Citizens will be able to pay using Bitcoin (BTC), Ethereum (ETH), and stablecoins such as USDC and USDT. This initiative is set to position Panama City as a regional pioneer in crypto adoption.
The city plans to partner with a local bank that will instantly convert all cryptocurrency payments into US dollars, complying with national regulations requiring government transactions to be conducted exclusively in USD. This real-time conversion system ingeniously allows the use of crypto at the payment front end, while maintaining legal tender compliance at the backend.
Mayor Mayer Mizrachi Matalon praised the city council’s decision as a “historic vote,” emphasizing the modernization of public finance and the expansion of access to decentralized payment options. Importantly, this system allows Panama City to sidestep the need for national legislative approval, creating a de facto crypto payment model within existing legal frameworks.
Meanwhile, Panama’s national crypto bill, introduced in 2022, remains under debate, aiming to regulate digital assets and blockchain with rigorous AML (anti-money laundering) and KYC (know-your-customer) rules. The bill also proposes frameworks for Virtual Asset Service Providers (VASPs), tokenized securities, smart contracts, and decentralized platforms. However, constitutional concerns and the role of the central bank have slowed progress in the Senate.
Panama City’s local adoption initiative may add pressure to accelerate national legislation by demonstrating the practical benefits and feasibility of integrating cryptocurrencies into public financial systems without jeopardizing legal compliance. Further details on supported payment providers and wallets will be announced ahead of the program’s launch later this year.