- Panama City clears crypto tax payments using instant USD conversion banks.
- Mizrachi’s plan bypasses legislation to launch city-wide crypto integration.
- Crypto law aims to regulate VASPs and build a compliant blockchain economy.
Panama City will begin accepting cryptocurrency payments for municipal services after a historic council vote. The move positions the capital as a regional leader in blockchain integration and government-level digital adoption.
City Council Clears Path for Crypto Payments
The Panama City council has unanimously approved the use of cryptocurrencies for taxes, permits, and public fees. “Panama makes history!” Bitcoin.com News stated in an update, highlighting Mayor Mayer Mizrachi’s announcement of the decision on April 15. The initiative will begin with Bitcoin (BTC), Ethereum (ETH), USDC, and USDT.
These payments will be processed through an authorized banking partner that instantly converts digital assets into U.S. dollars. This approach aligns with legal requirements mandating that all public transactions be denominated in USD. As a result, the city avoids new legislative hurdles while enabling crypto usage.
Authorized Conversion Solves Legal Constraints
According to the report, the administration sidestepped previous roadblocks by integrating a USD-converting bank into the payment process. This mechanism ensures all crypto transactions received by the city are immediately settled in fiat currency, upholding current monetary law. Mizrachi stated that earlier administrations failed to make this leap due to legislative limitations.
The city’s crypto integration will also support broader ambitions for a blockchain-based economy. Strategic objectives include improving public sector efficiency, enabling crypto-native startups, and attracting fintech investment. The project includes building out payment rails for real-time crypto-to-fiat conversion.
Crypto Regulation Bill Under Review
Besides municipal adoption, Panama is developing a comprehensive legal framework for digital assets. The proposed bill aims to license Virtual Asset Service Providers (VASPs), enforce KYC protocols, and regulate blockchain-based services. This effort will provide a clear compliance roadmap for companies operating in the space.
Moreover, the regulation intends to standardize digital custody, audit mechanisms, and exchange guidelines. As Latin American jurisdictions compete for crypto capital, Panama’s forward steps could signal its bid to become the region’s blockchain hub. Public-private initiatives are now underway to accelerate institutional readiness.
