Panama City Becomes the First Public Institution in the Country to Accept Cryptocurrency Payments

The city council has officially voted in favor of accepting cryptocurrency for government-related payments. As a result, Panama City has integrated Bitcoin (BTC) and Ethereum (ETH) alongside USD Coin (USDC) and Tether (USDT) into its payment infrastructure so that citizens can use digital assets for taxes and other public transactions.

Panama City has become the first public institution in the country to accept cryptocurrency payments, allowing residents to pay taxes and other public transactions in BTC, ETH, USDC, and USDT.

Local authorities in Panama City have voted in favor of accepting cryptocurrency for government-related payments, making it one of the first institutions in the country to do so.

As a result, the city has integrated Bitcoin (BTC) and Ethereum (ETH) alongside USD Coin (USDC) and Tether (USDT) into its payment infrastructure.

Announced on X by Mayor Mayer Mizrachi Matalon, this move will allow residents to use digital assets for public transactions.

The city council had to find a way to solve the public institution’s requirement for dollar fund acceptance even when the law stipulates U.S. dollar payments.

However, the city has no legal authorization to manage crypto-to-USD exchanges. To service this initiative, officials at Panama City have decided to develop a partnership with a local bank. The partnership will be used to accept dollar payments while the bank will manage crypto-to-USD exchanges for this service.

The program will begin with two major cryptocurrency choices, including Bitcoin and Ethereum, together with stablecoins USDC and USDT. Widely used in international financial deals, these digital assets are a logical starting point for this project.

This initiative also aligns with Panama’s broader efforts to modernize its financial and regulatory systems. Earlier this year, the Panamanian government launched a draft bill that would establish clear rules for the cryptocurrency sector and allow people to make optional digital payment transactions with the state.

The draft bill, which is still pending approval by the National Assembly, would also create the National Council of Digital Assets (CONAD).

This council would be responsible for overseeing digital asset regulations and supervisory functions. The bill stipulates that the governing body would work on building regulations for cryptocurrency use across civil and commercial business scenarios.

Moreover, it would require Virtual Asset Service Providers (VASPs) to meet international and national regulatory standards with its compliance requirements.

This initiative would also bring support for blockchain technology to be used in public sector applications such as digital identification programs and smart contracts, as well as transparent governance solutions.

The national crypto bill receives practical validation through this recent passage by the city council which demonstrates how digital assets function in government operations.

The country announces its willingness to innovate through this policy as well as its effort to draw investments for the tech and fintech industries. In addition, the adoption of crypto payments would drive both enhanced financial inclusivity and better transparency and efficiency.

The city provides additional service access to all its residents through digital currency acceptance since certain residents possess access to digital wallets instead of traditional banking options.

Accepting crypto payments in its city payment system marks significant progress for Panama City in integrating digital assets into its local administration.

Local governments are demonstrating their ability to pioneer financial innovation. The city will work alongside banks to convert cryptos into dollars, staying clear of legal restrictions while backing advanced financial solutions.

The national regulatory framework development will likely use this experimental program to establish standards that attract digital economy entry by other cities and countries. Ultimately, Panama undertakes this project to establish its position as a technologically advanced nation that embraces innovative banking tools in government programs.