​Panama City Embraces Cryptocurrency for Public Payments

Under the new framework, citizens will be able to use leading cryptocurrencies—such as Bitcoin (BTC), Ethereum (ETH), and the stablecoins USDC and USDT—to fulfill their financial obligations to the city. The initiative positions Panama City as one of the first Latin American capitals to embrace crypto at the municipal level, joining a small but growing list of jurisdictions globally experimenting with blockchain-based public finance.

Panama City mayor, Mayor Mizrachi, announced the decision via X:

The move is especially notable given Panama’s unique position as a dollarized economy. Since national law mandates that all official government transactions be conducted in U.S. dollars, the city partnered with a local banking institution that will instantly convert crypto payments into fiat currency at the time of transaction. This ensures full compliance with national financial regulations while opening the door for broader digital asset adoption.

Mizrachi acknowledged that previous administrations had attempted similar reforms but were blocked by legal and logistical hurdles. By introducing a real-time crypto-to-fiat conversion system, his administration was able to avoid those pitfalls, effectively sidestepping the need for legislative amendments at the national level.

This municipal-level initiative aligns with ongoing efforts at the national level to regulate the crypto industry. In 2022, Panama’s legislature passed a landmark bill to define and regulate crypto use cases, though the bill has yet to be fully enacted amid political delays. The legislation seeks to legalize voluntary crypto payments and establish regulatory bodies such as the National Council of Digital Assets (CONAD) to oversee the industry.

Panama City’s crypto acceptance could breathe new life into that legislative process, offering a live case study in how digital assets can coexist with traditional finance in a government setting.

Globally, Panama City joins other crypto-forward jurisdictions like Zug and Lugano in Switzerland, which already allow residents to pay taxes and utility bills in Bitcoin. In the United States, the state of Colorado began accepting crypto for tax payments in 2022, albeit with limited uptake. El Salvador remains the only country to have adopted Bitcoin as legal tender.

For residents, the most immediate change will be the ability to use wallets and mobile apps to settle obligations with the city—potentially offering a faster, more user-friendly alternative to traditional banking methods.

Panama City’s move also comes at a time when Latin America is seeing surging interest in crypto adoption. From remittances to inflation hedging, digital assets are increasingly viewed as a practical solution to long-standing financial challenges across the region.

As the capital city prepares to implement its new payment infrastructure, all eyes will be on how residents respond—and whether this pioneering move sets the stage for broader digital transformation throughout the country.

If successful, the policy could serve as a model for other municipalities in the region and beyond, signaling a new era of crypto integration into public finance.