Panama City is all set to incorporate crypto payments on a municipal level. By enabling citizens to use Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT) to pay taxes, parking fines, permits, and other municipal costs, Panama City is poised to become a regional leader in the adoption of cryptocurrencies.
This project, which was unveiled by Mayor Mayer Mizrachi on April 16, 2025, puts the city in the forefront of incorporating virtual currency into public services. ​
How Will The Payment System Work?
The city has teamed up with Towerbank to handle legal obligations that require public institutions to be paid in U.S. dollars. Before sending crypto payments to the local treasury, this financial institution will serve as a middleman and convert them into US dollars.
By taking this strategy, the requirement for new legislation that had previously blocked comparable projects is eliminated.
Cryptocurrency use for municipal payments is completely optional and will not take the place of current payment systems. Proponents contend that this action improves public finance’s inclusion, efficiency, and transparency while also following worldwide trends toward the adoption of digital assets.
The initiative from Panama City reflects a rising acceptance of cryptocurrencies in municipal operations and comes after similar developments in places like Colorado and Lugano, Switzerland.
Also Read: Panama Unveils Cryptocurrency Regulations Recognizing Crypto as Legal Payment
Panama City To Still be Dependent on Local Banks
With the help of cryptocurrencies like Bitcoin, Ethereum, USDC, and USDT, Panama City is launching a new system that will enable citizens to pay municipal costs including taxes, parking tickets, and licenses.
However, the city is putting in place a workaround because Panamanian law only accepts the US dollar as legal cash for transactions involving the government.
Prior to reaching the municipal treasury, all cryptocurrency payments will be instantaneously converted into US dollars through a collaboration with a nearby banks.
With this strategy, the city may embrace digital assets while still adhering to federal regulations. Without enacting new laws or changing current financial regulations, Panama City can accept cryptocurrency by employing a bank as a middleman.
Panama Still Cautious About Crypto on the National Level
When it comes to incorporating cryptocurrency into its payment systems, Panama City has made great progress.
But, at the national level, Panama has taken a cautious approach to regulating cryptocurrencies. To control the usage of cryptocurrency assets, the National Assembly passed Bill No. 697 in 2022.
However, President Laurentino Cortizo partially vetoed it because of worries about anti-money laundering compliance. Despite this, local administrations such as Panama City are looking into ways to integrate digital assets into their operations, indicating a growing national interest in the use of cryptocurrencies.
Also Read: Lomond School Makes History as First U.K. School to Embrace Bitcoin Tuition Payments