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In a bold move towards digital finance, Panama City’s government has announced it will accept Bitcoin, Ethereum, and stablecoins for taxes and fees, though payments will convert to USD.
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The longstanding legal obligation to exclusively accept USD limits the extent of true cryptocurrency adoption, as payment processing is managed by a partnered bank.
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This development follows failed attempts at broader national crypto legislation, indicative of the growing momentum behind global cryptocurrency regulation.
Panama City’s government will accept Bitcoin, Ethereum, and stablecoins for taxes and fees, although payments convert to USD, limiting true crypto adoption.
Is Panama City Embracing Cryptocurrency?
In recent months, jurisdictions globally have been increasingly welcoming towards cryptocurrencies. The latest addition to this trend is Panama City, where the municipal government has taken a significant step by allowing the payment of municipal obligations in various cryptocurrencies.
The announcement was made by Mayer Mizrachi, the mayor of Panama City, who stated, “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.”
Mizrachi pointed out that this push for increased crypto adoption follows a long path of legislative attempts to normalize cryptocurrency within the country. Four years ago, a legislative initiative aimed to enable widespread crypto payments throughout Panama, but it ultimately lost momentum and was deemed “unenforceable” by the Supreme Court in early 2023.
Despite this historical backdrop, Panama City’s municipal government has sought to bypass legislative roadblocks to introduce cryptocurrency payments. However, significant limitations remain. Mizrachi clarified that all public institutions must accept funds only in US dollars, thereby necessitating that all crypto payments be routed through a partnered bank.