In a major step toward modernizing its financial infrastructure, Panama City has officially approved a policy that allows residents to pay for public services using cryptocurrency.
The new system permits the use of Bitcoin, Ethereum, USD Coin (USDC), and Tether (USDT) for transactions such as taxes, permits, and government fines.
This development, approved by the Panama City Council, represents a significant advancement in digital finance within Latin America. It also signals Panama’s intent to carve out a forward-looking space in the global crypto economy—without overhauling its existing legal structure.
Mayor Mayer Mizrachi, who has been an outspoken advocate for technology-driven governance, explained that the initiative sidesteps the need for new legislation. Instead, the city partnered with a local bank to facilitate the process.
READ ALSO: PwC Shuts Down Offices in Nine African Countries Amid Strategic Overhaul
When residents make a payment in cryptocurrency, the bank steps in to instantly convert the crypto to U.S. dollars. This ensures that public institutions receive payments in the country’s legal tender, while still allowing residents the convenience of transacting in digital currencies.
According to the mayor, this model preserves the legality of transactions without burdening public agencies with the responsibility of managing volatile crypto assets. He noted that previous efforts to pass crypto-related legislation had stalled, but the city found a creative and legally sound workaround.
What sets Panama City’s approach apart from other countries like El Salvador, which made Bitcoin legal tender in 2021, is that it doesn’t compel businesses or government bodies to accept crypto.
READ ALSO: Dangote Refinery Slashes Petrol Price to ₦835 Per Litre
Instead, it presents an optional, user-friendly integration that works in harmony with traditional financial systems. This compatibility-driven approach may offer a more scalable and less disruptive model for cities and countries considering similar moves.
The initiative is being welcomed by Panama’s growing crypto community and digital entrepreneurs, who see this as a step toward mainstream adoption. At the same time, it provides reassurance to regulators and traditional finance players, since all crypto payments are ultimately settled in dollars.
Panama City’s new policy offers a practical blueprint for governments looking to modernize payment systems and embrace digital finance—without navigating the legal complexities of declaring a cryptocurrency as legal tender.
It opens the door for more inclusive and flexible financial interactions between citizens and the state, setting the stage for broader innovations in the public sector.
With this move, Panama City has positioned itself as a leader in crypto adoption, creating a legal and technological bridge between the digital economy and government services. It’s a bold yet balanced step into the future—and one that other cities around the world will no doubt be watching closely.
Discover more from Scoop Hub
Subscribe to get the latest posts sent to your email.