Panama City to Allow Cryptocurrency Payments for Taxes and Local Fees

Panama’s capital city will start accepting cryptocurrency payments for taxes and municipal fees, including bus tickets and permits, as announced by Panama City mayor Mayer Mizrachi on April 15. This decision aligns with a growing trend among various global jurisdictions that have adopted similar measures. Once the necessary crypto-to-fiat payment systems are set up, Panama City will accept Bitcoin (BTC), Ether (ETH), Circle’s USDC (USDC), and Tether’s USDt (USDT) stablecoin for payments, as shared by Mizrachi on the X platform. He noted that previous administrations had tried to implement comparable legislation but faced challenges due to requirements mandating the local government to accept funds only in US dollars.

In a statement, the mayor revealed that the local government has partnered with a bank that will promptly convert any digital assets received into US dollars, permitting the municipality to accept cryptocurrencies without needing new legislation. This initiative positions Panama City among numerous other global jurisdictions that are embracing cryptocurrency for tax payments and exploring strategic reserves of Bitcoin to insulate public treasuries from inflation, while also implementing favorable policies to attract investment.

Related: New York bill proposes legalizing Bitcoin, crypto for state payments

Municipalities and states are embracing digital assets in various capacities across the globe. For instance, Colorado began accepting crypto payments for taxes in September 2022, following a model similar to that which Panama City intends to adopt by converting crypto into fiat immediately.

In December 2023, Lugano, Switzerland, announced that taxes and city fees could be paid using Bitcoin, enhancing its reputation as a notable Bitcoin city. Additionally, Vancouver, Canada, made strides in December 2024 to become a “Bitcoin-friendly city,” with its local government exploring the integration of BTC into its financial system, including for tax payments.

Recently, North Carolina lawmaker Neal Jackson introduced legislation called the “North Carolina Digital Asset Freedom Act” on April 10. If enacted, this bill will recognize cryptocurrencies as an official form of payment for taxes.

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