- Panama City has approved cryptocurrency payments for public services including taxes, permits, and fees.
- The city will initially accept Bitcoin, Ethereum, USDC, and Tether (USDT) through partnerships with banks that convert crypto to fiat.
- This initiative bypasses previous legislative hurdles through a new approach that complies with Panama’s requirement for government institutions to receive payments in dollars.
Panama City has approved a proposal to accept cryptocurrencies as payment for various public services, Mayor Mayer Mizrachi announced on Wednesday via X (formerly Twitter). The new policy will enable residents to use digital assets to pay for taxes, tickets, permits, and fees, marking a significant shift toward crypto adoption in Panama’s capital city.
Initially, the city will accept four cryptocurrencies: Bitcoin, Ethereum, and the stablecoins USDC and Tether (USDT). The innovative approach sidesteps previous legislative hurdles that had stalled crypto adoption at the national level.
“Prior administrations tried to push a bill in the senate to make this possible, but we found a simple way to do it without new legislation,” Mizrachi said in his announcement. The mayor explained that since public institutions in Panama are legally required to receive funds in dollars, the city will partner with banks that can process cryptocurrency transactions and convert them to fiat currency.
Growing Global Crypto Adoption
Panama City’s initiative aligns with a broader global trend of cryptocurrency acceptance by governments. El salvador made headlines in 2021 as the first country to recognize Bitcoin as legal tender, followed by the Central African Republic in 2022. Other nations including Fiji and Tonga have explored similar recognition of Bitcoin as an official currency.
Switzerland has also made progress in this area, with some regions permitting Bitcoin payments for certain public services.
Panama’s Evolving Stance on Cryptocurrency
While Panama City moves forward with crypto adoption, the country’s national government has shown more caution. In 2022, Panamanian President Laurentino Cortizo partially vetoed a bill that would have regulated Bitcoin and legalized decentralized autonomous organizations.
According to local media outlet La Prensa, Cortizo’s reasoning was that the legislation “require[d] adaptation to the norms that regulate our financial system.” This history highlights the significance of Panama City finding a workaround to implement crypto payments without requiring new national legislation.
The city has not yet specified when it might expand its acceptance to additional cryptocurrencies beyond the initial four. City representatives did not immediately respond to Decrypt’s request for comment on implementation details or timeline for the initiative.
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