Residents of Panama City can now pay for public services, such as taxes, tickets, permits, and other government fees, using Bitcoin, Ethereum, and stablecoins like USDT and USDC. This development follows an approval by the Panama City Council, making it the first government institution in the country to accept cryptocurrency payments.
With a population of 1.08 million, Panama City is the capital of Panama, a country located in Central and South America.
The approval reflects the government’s growing interest in blockchain and cryptocurrency, as these technologies continue to reshape the financial sector. This move is expected to simplify payment processes and help the government expand its tax base.
Panama City’s Mayor, Mayer Mizrachi, who shared the news with excitement on social media, said, “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.”
How It Works
When residents make payments to public institutions using cryptocurrency, the digital assets are instantly converted into U.S. dollars. This is made possible through partnerships with financial institutions in the city. The banks handle the conversion process.
“This allows for the free flow of crypto throughout the entire economy and government,” said the Mayor.
Wider Context
Panama City isn’t the only place showing interest in integrating digital assets into daily transactions. The administration of former U.S. President Donald Trump has shown enthusiasm for crypto, including launching a meme coin called $TRUMP.
Across Africa, some countries are also revising their policies in favour of cryptocurrencies. For instance, Nigeria, once known for cracking down on crypto exchanges, is now requiring that such operators be duly registered. This move is seen as an attempt to regulate and monitor crypto activities in Africa’s largest economy.
Implication
The new policy is expected to encourage more businesses in Panama to accept cryptocurrency as a form of payment. This could lead to broader digital payment adoption among entrepreneurs and their clients.
Experts say the move will not only expand the customer base for businesses but also reduce transaction costs and speed up processing times, especially for international transactions.