Panama City Approves Crypto Payments for Municipal Taxes and Fees

Highlights:

• Panama City approves crypto payments for municipal taxes and fees.
• The city will convert crypto payments to USD through a bank partnership.
• The new system enhances financial transparency and modernizes Panama’s payment infrastructure.

The city of Panama has made a huge leap toward acceptance of cryptocurrencies as a means of payment in its public system. The residents of the city can pay taxes, tickets, and permits in Bitcoin, Ether, as well as in stablecoins like Tether (USDT) and USD Coin (USDC). This came after the city council passed a vote, thus making Panama the largest city at the global forefront of embracing the adoption of digital assets in government transactions.

Mayor Mayer Matalon Mizrachi announced the development in a tweet on X (formerly Twitter). This makes Panama City become the first public institution in the country to accept digital assets for municipal payment. The city has engaged the services of Towerbank International Inc. and Towertrust Inc. in putting in place a secure escrow-like system. This system converts the received crypto payments into U.S. dollars required by the Panama government transactions.

🇵🇦 Panama City council has just voted in favor of becoming the first public institution of government to accept payments in Crypto.

Citizens will now be able to pay taxes, fees, tickets and permits entirely in crypto starting with BTC, ETH, USDC, USDT@APompliano @aantonop…

— Mayer Mizrachi (@Mayer) April 15, 2025

The Implementation of Crypto Payments

The new system introduced in Panama allows individuals to make payment in cryptocurrency without having the municipality in holding digital assets. The transactions are smooth as the bank managing the conversion immediately converts the received cryptocurrency to USD. This way, the city can avoid various complications arising from digital assets volatility while embracing assets.

Residents can choose to pay for their municipal spending in cryptocurrencies. The initiative does not exclude other payment systems offering citizens a choice between traditional modes of payment and cryptocurrencies. This flexibility is expected to attract crypto holders who wish to use their coins in their day-to-day activities.

Moreover, Panama City’s implementation of accepting crypto payments also does not affect the mayor’s cost or alter taxation policies in any way. Through the application of blockchain technology, the city enhances its ability to provide transparent financial information and improve its payment infrastructure. The authorities of Panama’s Panama City believe that similar initiatives should encourage other regions to accept digital currencies.

Broader Implications and Legislative Developments

This is part of a larger effort that Panama has been undertaking to adopt cryptocurrencies. Earlier this year, the government of Panama proposed a draft bill to legalize cryptocurrencies in different industries in the country. The bill proposes establishing a new regulatory body called the National Council of Digital Assets (CONAD). This will be aimed at addressing all the legal issues relating to cryptocurrencies and their usage.

Further, the bill seeks to also introduce regulation of VASPs and the utilization of blockchain technology in other areas of governance and digital identity management. As Panama’s National Assembly considers the bill, the city’s initiatives could set the tone for Panama’s overall approach to modernizing the country’s economy and positioning itself as a hub for digital assets.

There is a tendency of cities adopting the use of cryptocurrency in the payment of taxes. Currently, Colorado, Minnesota, and Louisiana have implemented similar pilot programs in the United States. However, the acceptance rate has been slow, with only a handful of crypto tax payments.