- Local law permits payment of taxes, tickets, and permits.
- The city partners with a bank to convert crypto into fiat.
- Panama bypasses national law through a municipal regulation.
Panama City will become one of the first major Latin American capitals to officially integrate cryptocurrency payments into its municipal system, allowing residents to pay for public services using Bitcoin, Ethereum, and stablecoins.
This move, driven by the city administration rather than national legislation, marks a notable shift in how local governments are adopting digital assets.
Panama City Mayor Mayer Mizrachi confirmed the initiative in a post on X (formerly Twitter) on Wednesday.
He said residents will be permitted to settle taxes, permits, traffic fines, and other municipal fees with cryptocurrencies such as Bitcoin, Ethereum, USDC, and Tether (USDT).
The initiative was approved by the city council and will be implemented in partnership with a bank capable of accepting and converting crypto into fiat currency.
Crypto rollout starts with top tokens
The new ordinance gives residents the option to use certain cryptocurrencies instead of fiat to fulfill obligations to the city government.
The digital assets initially accepted include Bitcoin, Ethereum, USDC, and USDT—tokens widely used across retail and institutional ecosystems.
Unlike previous attempts to enable crypto use through national legislation, Panama City’s administration found a way to move forward by focusing on local regulation.
Mizrachi explained that earlier efforts sought similar measures at the Panamanian senate, but his administration opted for a simpler legal route that avoids introducing entirely new national laws.
There is no official confirmation yet on whether additional cryptocurrencies will be accepted in the future. A city representative did not immediately respond to media inquiries about expanding the asset list.
Bank handles conversion
To operationalize the system, the city will rely on partnerships with banks that can technically receive digital assets and convert them into fiat currency.
This model allows Panama City to remain compliant with national financial regulations while offering residents the freedom to transact in crypto.
By allowing local banks to act as intermediaries, the city aims to balance innovation with compliance. The approach is intended to encourage broader crypto adoption in Panama without pressuring the central government to enact sweeping policy changes.
Global crypto adoption rises
Panama City’s step reflects a broader regional and global trend as governments increasingly accommodate payments in digital assets.
In 2021, El Salvador became the first country to adopt Bitcoin as legal tender, followed by the Central African Republic the next year. Other nations, including some Pacific island states, have also considered recognizing Bitcoin in official capacities.
In Switzerland, cities like Zug and Lugano have enabled crypto payments for local services. Zug earned the nickname “Crypto Valley” for its openness to blockchain technology and supportive regulatory environment.
Panama’s relationship with cryptocurrencies has been mixed. In 2022, President Laurentino Cortizo vetoed parts of a bill intended to regulate digital currencies and legalize decentralized autonomous organizations (DAOs).
At the time, the president expressed concern that the proposed law did not fully align with existing financial system norms.
Despite that national-level setback, Panama City’s recent move demonstrates how local governments can proceed with targeted implementations—such as public service payments—even when national consensus is lacking.
National tensions persist
Although Panama City is still in the early stages of rolling out the program, its approach could serve as a model for other municipalities that want to adopt crypto without overhauling national law.
By partnering with regulated financial institutions, the city aims to provide a secure and legally compliant method for residents to use digital assets in everyday transactions.
Whether this local strategy can be scaled more broadly remains to be seen. Still, it highlights the growing influence of cryptocurrencies on mainstream economic infrastructure—not merely as speculative assets but as practical tools for public finance.