Panama City, Panama, has taken a significant step forward in cryptocurrency adoption. On April 16, 2025, Panama City Mayor Mayer Mizrachi announced that the city council had voted to accept cryptocurrency payments for public services, positioning the capital as the first government institution to integrate digital currencies into its municipal payment system formally.
What This Means for Panama City Residents
Citizens can now use major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and stablecoins like USD Coin (USDC) and Tether (USDT) to pay for various government services. These services include taxes, parking tickets, permits, and other municipal fees. This initiative provides residents with additional payment options while promoting broader cryptocurrency adoption.
Creative Solution to Regulatory Challenges
What makes this development particularly interesting is how Panama City navigated around regulatory hurdles. Previous administrations had attempted to push legislation through the Senate to enable crypto payments but were unsuccessful. Mayor Mizrachi’s administration found an innovative workaround without requiring new legislation.
Since Panamanian law mandates that public institutions receive funds in US dollars, the city partnered with a local bank to handle cryptocurrency transactions. The bank will receive crypto payments and convert them immediately to dollars, ensuring legal compliance while allowing citizens to pay with digital assets.
“This allows for the free flow of crypto in the entire economy and entire government,” Mizrachi stated in his announcement.
Setting a Precedent for Government Adoption
Unlike El Salvador’s approach of making Bitcoin legal tender, Panama City’s model is optional and integrates with existing financial systems. This positions Panama City among forward-thinking jurisdictions like Lugano, Switzerland, and certain US states such as Colorado that have embraced cryptocurrency payments for government services.
The city’s approach provides a template that could inspire other municipalities worldwide to adopt similar systems for incorporating digital currencies into public services while maintaining regulatory compliance.
This significant step forward for cryptocurrency adoption in Latin America demonstrates how local governments can embrace innovation in financial technology, even when national legislation moves at a different pace.