- Local law allows payment for taxes, tickets, and permits.
- City partners with banks to convert crypto to fiat.
- Panama bypasses national legislation through local ordinance.
Panama City is set to become one of the first Latin American capitals to formally integrate crypto payments into its municipal system, allowing residents to pay for public services in Bitcoin, Ethereum, and stablecoins.
This move, driven by the city’s administration and not national legislation, marks a notable shift in how governments are embracing digital assets.
Panama City Mayor Mayer Mizrachi confirmed the development via a post on X (formerly Twitter) on Wednesday.
He stated that locals will be allowed to settle payments for taxes, permits, traffic tickets, and other municipal fees using cryptocurrencies such as Bitcoin, Ethereum, USDC, and Tether (USDT).
This step was made possible through a council-approved proposal and will be implemented in collaboration with banks that can receive and convert crypto to fiat currency.
Crypto rollout starts with top tokens
The new law gives local residents the option to use select cryptocurrencies instead of fiat money to meet their obligations to city hall.
The digital assets initially accepted include Bitcoin, Ethereum, USDC, and USDT, which have become widely adopted across both retail and institutional ecosystems.
Unlike previous efforts that attempted to implement crypto usage through national-level legislation, Panama City’s government found a way to bypass this hurdle by focusing on local regulation.
Mizrachi explained that earlier governments tried to push similar measures through Panama’s senate, but his administration opted for a simpler legal workaround that avoided introducing entirely new laws.
So far, there has been no official confirmation on whether other cryptocurrencies will be accepted in the future. A city representative did not immediately respond to media enquiries about the possible expansion of the asset list.
Banks to handle conversion
In order to operationalise this system, the city will rely on partnerships with banks that are technically capable of receiving digital assets and converting them to fiat.
This model allows Panama City to remain in line with national financial regulations while also giving residents the freedom to transact in crypto.
By allowing local banks to act as intermediaries, the city is aiming to balance innovation with compliance. The measure is expected to support wider crypto adoption in Panama without putting pressure on the central government to introduce sweeping policy changes.
Global crypto adoption grows
Panama City’s move reflects a broader shift across the region and beyond as governments begin to accommodate digital asset payments.
In 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender, followed by the Central African Republic the following year. Other countries such as Fiji and Tonga have also considered recognising Bitcoin as an official currency.
In Switzerland, municipalities like Zug and Lugano have already enabled payments for local services using cryptocurrencies. Zug has earned the nickname “Crypto Valley” for its openness to blockchain technology and favourable regulatory environment.
Panama, by contrast, has had a mixed relationship with crypto. In 2022, Panamanian President Laurentino Cortizo partially vetoed a bill that aimed to regulate cryptocurrencies and legalise decentralised autonomous organisations (DAOs).
At the time, the president cited concerns that the bill was not fully aligned with existing financial system norms.
Despite this national-level setback, Panama City’s latest move highlights how local governments can still proceed with adoption in specific areas such as public service payments.
National tensions remain
While Panama City is still in the early stages of implementation, its approach could serve as a model for other urban centres looking to embrace crypto without overhauling national law.
By partnering with compliant financial institutions, the city hopes to provide a secure and legally sound way for citizens to use their digital assets in everyday transactions.
Whether this local strategy can scale remains to be seen. But it underscores the growing influence of cryptocurrencies in mainstream economic infrastructure—not just as speculative assets, but as tools for public finance.
