The Panama City council has voted to become the first public institution of government to accept cryptocurrency payments for taxes, fees, tickets, and permits. Starting immediately, residents can settle these obligations using Bitcoin (BTC) and Ethereum (ETH) as well as leading stablecoins USD Coin (USDC) and Tether (USDT).
The announcement was officially shared on X by Mayor Mayer Mizrachi and it bypasses a stalled senate bill that previously aimed to legalize crypto payments. Instead, the city has devised an innovative workaround by partnering with a local bank to facilitate transactions.
“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,” said Mayor Mizrachi, adding “Legally public institutions must receive funds in $, so we partner with a bank who will take care of the transaction receiving in crypto and convert on spot to $.”
This pragmatic approach allows for the “free flow of crypto” throughout the city’s economy without necessitating new legislation.
This move marks a significant step toward integrating digital currencies into the fabric of local governance. Under the arrangement, payments made in cryptocurrency are instantly converted to U.S. dollars while ensuring compliance with legal requirements that public institutions receive funds in USD.
The initiative contrasts sharply with El Salvador’s bold 2021 decision to adopt Bitcoin as legal tender, a move that has faced challenges due to the cryptocurrency’s volatility.
However, Panama City’s model keeps crypto payments optional and confines public sector engagement to conversions. This enhancement mitigates similar risks while encouraging crypto adoption across the city.
Also read: Could Cardano Price Hit $3 Ahead of Bitcoin Staking Integration?
