Panama City begins to accept Bitcoin (BTC), Ethereum (ETH) and popular stablecoins such as USDC and USDT for payments for public services, including taxes, reimbursements, permits and fines, in a movement that positions capital as a regional pioneer in crypto -bingcordation.
Mayor Mayer Mizrachi Matalon announced the initiative on April 16 and called it a “historical mood” of the city council to modernize public finances and to expand access to decentralized payment options.
The change is set to get into force by a partnership with a local banking institution that will immediately convert incoming crypto payments into US dollars, which remains the only legal tender that is permitted for government transactions in Panama.
The mechanism enables Panama City to circumvent a national legal obstacle: according to the Panamanic law, government agencies must handle transactions exclusively in US dollars.
By integrating a real-time conversion system through the bank, the city maintains legal compliance and allows it at the front of crypto use. This solution makes a de facto crypto payment system possible without the approval of the national legislative power.
Crypto legislation
The announcement comes if the Panamanian government continues to debate about a long delayed national crypto account
Introduced for the first time in 2022, the bill has been revised several times over the years. The proposed legislation would determine a legal framework for blockchain innovation and digital assets throughout the country.
However, it has had to deal with repeated obstacles in the Senate, in particular with regard to constitutional concerns and the role of the central bank.
The latest version of the draft drawing, unveiled earlier this year, strives for regulating virtual asseters (VASPs), including trade fairs and digital portfolios, while maintaining strict anti-money laundering practices (AML) and Know-Your-Customer (KYC) rules.
The framework also outlines guidelines for the use of blockchain in legal and financial services, including Tokenized effects, smart contracts and decentralized platforms.
The relocation of Panama City could act as a pressure point for a broader acceptance of the crypto account, which demonstrates the feasibility to integrate digital assets into existing financial systems without risking legal non-compliance.
The city did not disclose which payment providers or portfolios are supported, but local authorities said that further guidelines would be released later this year before the full rollout of the program.
