Panama City has approved a measure allowing residents to pay for public services using cryptocurrency. 

The city council voted to enable payments in Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT) for services like taxes, permits, and fines. 

A partner bank will convert the crypto to U.S. dollars at the time of payment, complying with legal requirements without passing new legislation.

“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 legistlation,” Panama City’s Mayor Mayer Mizrachi posted. “Legally public institutions must receive funds in $, so we partner with a bank who will take care of the transaction receiving in crypto and convert on spot to $. This allows for the free flow of crypto in the entire economy and entire government.” 

The new system gives residents a way to use crypto for everyday transactions with the government, while making sure the city still receives payments in its official currency. 

It also gives Panama’s crypto economy room to grow without requiring every institution to manage digital assets directly.

This step differs from El Salvador’s approach, which made Bitcoin legal tender in 2021. Panama’s model is optional and focused on compatibility with existing financial systems.