Panama City approves measure allowing residents to pay taxes with Bitcoin, Ethereum, USDC, and USDT

This makes Panama City the first public institution in Panama to accept crypto payments.

Panama City's council has approved a measure that will allow residents to pay taxes, fines, fees, and permits using cryptocurrencies.

This makes Panama City the first public institution in Panama to accept crypto payments.

The city will be accepting Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT) for public sector obligations.

Announcing the initiative, Mayor Mayer Mizrachi said that the move will bypass the need for new legislation by partnering with a bank to instantly convert crypto payments into U.S. dollars. This ensures compliance with legal requirements for dollar-based transactions.

The system is expected to be fully implemented later in 2025, and the banking agreement is expected to be finalized soon after the announcement.

This move aligns with a broader trend as several other jurisdictions, including Colorado, Lugano (Switzerland), and Vancouver, have also introduced or explored options for accepting crypto for public payments.

However, Panama City's approach is focused on local governance and provides residents with the option to use crypto without mandating its acceptance by businesses.

Accepting Bitcoin, Ethereum, USDC, and Tether legitimizes these cryptocurrencies as viable payment methods in Panama City, potentially encouraging broader adoption among residents and businesses.

This could also normalize crypto use in everyday transactions and inspire other municipalities in Panama or Latin America to follow suit.

Moreover, offering crypto payments could provide access to government services for unbanked or underbanked individuals who hold digital assets, fostering inclusivity in a region where traditional banking access can be limited.

As one of the first public institutions in Panama to accept crypto, Panama City joins a growing list of global jurisdictions embracing digital currencies. This could enhance Panama's reputation in the global crypto community and attract crypto investors and tourists.

Partnering with a bank to instantly convert crypto to U.S. dollars minimizes volatility risks and simplifies accounting for the city. This could also streamline payment processing and reduce reliance on traditional financial intermediaries, potentially lowering costs.

By bypassing the need for new legislation, Panama City sets a practical model for integrating crypto into public finance within existing legal frameworks. This could influence national policy or encourage other jurisdictions to adopt similar workarounds.

However, it may also prompt regulatory scrutiny to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) standards.

While the instant conversion to dollars mitigates price volatility, the city must ensure robust cybersecurity and reliable banking partnerships to prevent fraud, hacks, or transaction errors, which could undermine public trust.