Panama City Mayor Announces Bitcoin and Ether Acceptance for Government Payments

TLDR

• Panama City will accept Bitcoin, Ether, USDC, and USDT for taxes and municipal fees
• Mayor Mayer Mizrachi announced the decision on April 15, 2025
• The city partnered with a bank to immediately convert crypto to US dollars
• This approach bypasses previous legislative hurdles requiring payments in USD
• Panama City joins Colorado, Lugano, and Vancouver among jurisdictions embracing crypto payments

Panama City is set to accept cryptocurrency payments for taxes and municipal fees, according to an announcement made by Mayor Mayer Mizrachi on April 15. This move places the capital city among a growing number of jurisdictions worldwide that are incorporating digital assets into their payment systems.

Residents will soon be able to use Bitcoin (BTC), Ether (ETH), Circle’s USD Coin (USDC), and Tether’s USDt for various payments. These include taxes, bus tickets, and permits.

The mayor explained that the new payment option will be available once the necessary crypto-to-fiat payment infrastructure is established. Mizrachi shared this information through a post on the X social media platform.

🇵🇦 Panama City council has just voted in favor of becoming the first public institution of government to accept payments in Crypto.

Citizens will now be able to pay taxes, fees, tickets and permits entirely in crypto starting with BTC, ETH, USDC, USDT@APompliano @aantonop…

— Mayer Mizrachi (@Mayer) April 15, 2025

Overcoming Regulatory Challenges

Previous city administrations had attempted to implement similar cryptocurrency payment options. These efforts faced obstacles due to regulations requiring the local government to accept funds denominated in US dollars.

Mizrachi revealed that the city found a workaround to this challenge. The local government has partnered with a bank that will immediately convert any received digital assets into US dollars.

This solution allows the municipality to accept cryptocurrency payments without the need to introduce new legislation. The conversion process ensures compliance with existing financial regulations.

The immediate conversion model mirrors approaches used by other governments that have implemented crypto payment options. This method helps manage volatility risks associated with cryptocurrency holdings.

Global Trend of Government Crypto Adoption

Panama City is not alone in its embrace of cryptocurrency payment options. A growing number of municipalities, states, and national governments worldwide are exploring or implementing similar initiatives.

Colorado became one of the early adopters in the United States when it began accepting crypto for tax payments in September 2022. Like Panama City’s planned approach, Colorado immediately converts received crypto to fiat currency.

Lugano, Switzerland made headlines when it announced in December 2023 that taxes and city fees could be paid in Bitcoin. This was one of several cryptocurrency initiatives that have earned Lugano recognition as a “Bitcoin city.”

In Canada, the Vancouver city council passed a motion to become a “Bitcoin-friendly city” in December 2024. As part of this initiative, Vancouver’s local government will explore integrating Bitcoin into its financial system, including for tax payments.

More recently, North Carolina has been considering legislation that would formalize cryptocurrency as an accepted payment method. State lawmaker Neal Jackson introduced “The North Carolina Digital Asset Freedom Act” on April 10, 2025.

If passed, the North Carolina bill would recognize cryptocurrencies as an official form of payment that can be used for tax obligations. This represents another step in the expanding acceptance of digital assets by government entities.

Beyond tax payments, some jurisdictions are exploring broader applications of blockchain technology. These include strategic Bitcoin reserves to protect public treasuries from inflation.

Others are passing pro-crypto policies aimed at attracting investment and fostering innovation in the blockchain sector. These varied approaches reflect different strategies for incorporating digital assets into public finance.

Panama City’s decision to accept cryptocurrency payments represents a practical approach to digital asset integration. By partnering with a bank for immediate conversion, the city maintains compliance with dollar-denominated requirements.

The move also provides residents with additional payment options, potentially increasing convenience for those who hold cryptocurrencies. As more governments explore similar options, the trend of public sector crypto adoption continues to grow.