Panama City, the capital of Panama, has recently announced that it will begin accepting popular cryptocurrencies such as Bitcoin, Ethereum, and stablecoins for public service payments. This move, spearheaded by Mayor Mayer Mizrachi Matalon, is aimed at modernizing public finance and expanding access to decentralized payment options in the region. By partnering with a local banking institution, incoming crypto payments will be instantly converted into US dollars, the only legal tender authorized for government transactions in Panama. This innovative mechanism allows Panama City to maintain legal compliance while enabling the use of cryptocurrencies at the front end, without requiring approval from the national legislature.
This development in Panama City comes as the Panamanian government continues to debate a national crypto bill that has been in the works since 2022. The proposed legislation aims to establish a legal framework for blockchain innovation and digital asset use across the country. However, the bill has faced challenges in the Senate, particularly regarding constitutional concerns and the role of the central bank. The latest version of the draft bill focuses on regulating Virtual Asset Service Providers (VASPs), enforcing strict anti-money laundering (AML) and know-your-customer (KYC) rules, and outlining guidelines for blockchain use in legal and financial services.
By integrating a real-time conversion system through a local banking institution, Panama City’s initiative to accept cryptocurrencies for public service payments could serve as a catalyst for broader adoption of the national crypto bill. This move demonstrates the feasibility of incorporating digital assets into existing financial systems while ensuring legal compliance. While the city has not disclosed which payment providers or wallets will be supported, further guidance will be released before the full rollout of the program later this year. As Panama City positions itself as a regional pioneer in crypto adoption, other cities and countries may look to follow suit in embracing digital currencies for public service payments.
Overall, Panama City’s decision to accept cryptocurrencies for public service payments signifies a significant step towards modernizing public finance and expanding access to decentralized payment options in the region. By partnering with a local banking institution to convert incoming crypto payments into US dollars, the city is able to maintain legal compliance while enabling the use of Bitcoin, Ethereum, and stablecoins for taxes, fees, permits, and fines. This move comes amid ongoing debates over a national crypto bill in Panama, highlighting the potential for broader adoption of digital assets in the country’s financial system. As Panama City leads the way in crypto adoption, other cities and countries may look to emulate its innovative approach to integrating cryptocurrencies into public service payments.
