Crypto Takes Off in Panama: City to Accept Bitcoin, Ethereum for Public Services

Panama City’s council is all set to accept cryptocurrency payments for taxes, fees, tickets, and permits.

The decision, announced on April 16th, marks a significant step in Panama’s integration of digital currencies into everyday public services. The city will initially accept major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), as well as stablecoins like USD Coin (USDC) and Tether (USDT).

Unlike past efforts where attempts to push similar legislation failed in the Senate, the city found a creative solution to bypass the need for new laws.

According to the official announcement by Mayor Mayer Mizrachi Matalon on X, public institutions are required to receive funds in US dollars. However, by partnering with a local bank, Panama City will handle crypto transactions by converting the payments into dollars on the spot. This partnership ensures that cryptocurrency can flow freely within the economy and government while maintaining legal compliance, Mizrachi added.

“Panama City council has just voted in favor of becoming the first public institution of government to accept payments in crypto.”

This latest development comes on the heels of a proposed regulatory framework for cryptocurrencies, unveiled by Panama’s government earlier this year. The draft bill aims to regulate digital assets and create a legal structure for blockchain-based services, positioning Panama as a leader in fintech innovation in Latin America.

Besides cryptocurrencies like Bitcoin and Ethereum being officially recognized for transactions, the framework also introduces licensing requirements for Virtual Asset Service Providers (VASPs), such as exchanges and wallets, and enforces strict compliance with anti-money laundering (AML) and Know-Your-Customer (KYC) regulations.