In a major step forward for crypto adoption in Latin America, Panama City’s council has approved a measure allowing residents to pay for public services using cryptocurrency. The vote makes Panama City the first local government institution in the region to officially accept digital assets for civic transactions like taxes, fees, fines, and permits.
The newly adopted system will support Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT), offering residents a more flexible and modern way to handle government payments. Importantly, the city has implemented a structure that converts crypto payments to U.S. dollars at the moment of the transaction—ensuring compliance with existing financial regulations.
“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 Mayer Mizrachi. “Legally, public institutions must receive funds in dollars, so we partnered with a bank that handles the crypto conversion instantly. This allows for the free flow of crypto in the entire economy and entire government.”
A Hybrid Approach to Government Crypto Adoption
Unlike El Salvador, which made Bitcoin legal tender in 2021, Panama City’s model is entirely optional. Government departments won’t be required to manage crypto directly, as the city’s partner bank will handle the backend conversion. This keeps the system compatible with Panama’s existing legal and financial frameworks.
Residents now have a more seamless path to using digital assets in everyday transactions with the government, while the city continues to receive all payments in U.S. dollars—its official currency.
The measure also opens new doors for Panama’s growing crypto sector, creating a bridge between Web3 technologies and traditional public services without requiring sweeping legislative reforms.
“This is not just a tech play—it’s about modernization and efficiency,” said a city council spokesperson. “We’re embracing innovation without disrupting legal requirements.”
A Boost for Latin America’s Crypto Ecosystem
The development positions Panama City as a leader in public sector crypto integration and could influence other cities or governments across the region to follow suit. With stablecoins and major cryptocurrencies gaining popularity in Latin America amid inflation and banking instability, Panama City’s move is both timely and strategic.
Crypto analysts note that while the measure doesn’t yet change national law, it offers a clear and scalable model for integrating crypto into public finance—especially in countries where digital asset legislation is still in flux.
