Panama City Becomes First in the Nation to Accept Cryptocurrency Payments

The Panama City Mayor has said the Panama District municipality will become the first in the nation to accept cryptocurrency payments for services.

Panama District municipality will become the first in the nation to accept cryptocurrency as a form of payment for services, the city's mayor has said, following unanimous approval by the City Council.

The decision, which was made on Thursday, will allow residents of Panama City to pay their municipal obligations and taxes using cryptocurrencies, such as Bitcoin and Ethereum. The new payment system will operate through an authorized bank, which will handle the conversion of cryptocurrency payments into U.S. dollars for the Mayor’s Office.

This partnership aims to facilitate the integration of cryptocurrencies while mitigating potential volatility for the municipality's finances.

"My dear City Council has unanimously approved an initiative initiated by the Mayor’s Office, which will allow all citizens to pay their obligations and taxes in crypto," the mayor announced.

"This measure, which sets a precedent in the country, will position Panama District as the first municipality to offer this option to its taxpayers."

Mayor Mizrachi added that Panama, recognized as Central America's financial hub, was lagging in adopting this modern payment method.

"Legally, it’s simple: the Mayor’s Office receives dollars, but there’s an intermediary who receives the crypto, transforms it into dollars, and takes it to the Mayor’s Office."

He noted that a formal announcement with further details will be made once the agreement with the partnering bank is finalized.

"This allows for the free movement of cryptocurrencies throughout the economy and throughout government," Mizrachi elaborated.

Earlier this year, Panama positioned itself as a Latin American hub for cryptocurrencies and introduced a draft bill aiming to regulate cryptocurrencies and establish a legal framework for blockchain-based services in the country.

The bill, which was submitted to the National Assembly in February, outlines licensing requirements for Virtual Asset Service Providers (VASPs) to register with Panama’s Financial Analysis Unit (UAF) and comply with relevant regulations, including anti-money laundering and Financial Secrecy Law.

It also mandates VASP licenses to be renewed annually and outlines procedures for freezing virtual asset transactions in response to legal or administrative measures.

If passed, this legislation could provide greater legal clarity and consumer protection while fostering innovation in Panama’s digital economy.