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Panama City to Accept Crypto Payments—But You’ll Still Pay in US Dollars!

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Panama City to Accept Crypto Payments, But Settled in <a href="https://usdinrusd.com/eur-usd/">US Dollar</a>

Mayor Mayer Mizrachi from Panama City, Panama, shared today’s news that the local administration is now open to receiving digital currency payments. This includes Bitcoin, Ethereum, and two stablecoins, which can be used for taxes, permits, fees, and other similar purposes.

Nevertheless, Mizrachi explained that the city administration is bound by law to receive these funds exclusively in U.S. dollars. They will convert cryptocurrencies into cash through a collaborating bank, which imposes a significant barrier for widespread cryptocurrency acceptance.

Is Panama City Accepting Crypto?

Over the past few months, there’s been a strong movement favoring crypto regulations in numerous international legal systems. Notably, this wave has affected both federal and state entities in the U.S., but an increasing number of countries worldwide are following suit.

For instance, the mayor of Panama’s main city has declared that their local administration will start accepting digital currencies as payment.

Mayer Mizrachi, Mayor of Panama City, announced that the city council has approved a decision to accept digital currencies as payment for taxes, fees, fines, and permits. This makes Panama City the first government institution to do so, with Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT) being the initial cryptocurrencies accepted.

As a researcher delving into the realm of cryptocurrencies, I’d like to share some historical attempts at integrating cryptocurrency transactions within Panama. Approximately four years ago, there was a legislative push to nationwide accept crypto payments across the country.

The initiative gained momentum initially, but by 2022, it had come to a standstill. Later in 2023, the Supreme Court declared the legislation as “inaffective.” Since that time, there haven’t appeared to be any substantial attempts moving forward with the issue.

The city government of Panama City is finding ways around the legislature to accept cryptocurrency payments, but Mizrachi points out that such a move comes with notable disadvantages. He stated that official institutions are obligated to receive U.S. dollars, and they cannot bypass this regulation.

Essentially, when you make crypto payments, they’ll end up in a bank we work with. This bank will manage or sell off these cryptocurrencies, while the city itself only deals with USD. Mizrachi’s initiative bypasses a potentially heated legislative debate, but its practical implications could be significantly restricted.

In some aspects, while Panama officially uses the balboa as its currency, the US dollar holds greater legal recognition. It’s considered legal tender, meaning that public establishments are obligated to accept it. Interestingly, the balboa itself is linked to the US dollar, serving as a one-to-one equivalent in value.

In much the same vein as El Salvador, this scenario bears resemblance, for they both share the circumstance of utilizing the U.S. dollar as their exclusive tender.

Mizrachi clarified that this temporary solution aims to boost the circulation of cryptocurrencies within Panama’s economic system. However, he cautioned that the complexity might not be fully appreciated. If a deal is struck between the city administration and collaborating banks, it could potentially offload its digital assets onto global markets.

If Panama seriously intends to embrace cryptocurrencies, it might be crucial to incorporate more eco-friendly strategies within its economic system.

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2025-04-17 01:15

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