Panama City Leads the Way in Crypto Adoption
Panama City is making waves in the world of cryptocurrency by announcing that it will start accepting Bitcoin (BTC), Ethereum (ETH), and popular stablecoins such as USDC and USDT for public service payments. This move, spearheaded by Mayor Mayer Mizrachi Matalon, is seen as a historic vote by the city council to modernize public finance and provide more options for decentralized payments.
The initiative, set to take effect through a partnership with a local banking institution, will see incoming crypto payments instantly converted into US dollars. This is a strategic move to comply with Panamanian law, which mandates that government agencies transact exclusively in US dollars. By integrating a real-time conversion system, Panama City is able to offer crypto payment options without violating any legal requirements.
The timing of this announcement is significant, as the Panamanian government continues to debate a national crypto bill that has been in the works since 2022. The bill aims to establish a legal framework for blockchain innovation and digital asset use in the country, but has faced obstacles in the Senate due to concerns about constitutional issues and the role of the central bank.
The latest version of the draft bill focuses on regulating Virtual Asset Service Providers (VASPs) and enforcing strict anti-money laundering (AML) and know-your-customer (KYC) rules. It also outlines guidelines for using blockchain in legal and financial services, including tokenized securities, smart contracts, and decentralized platforms.
Panama City’s decision to accept cryptocurrencies for public service payments could serve as a catalyst for broader adoption of the national crypto bill. By demonstrating the feasibility of integrating digital assets into existing financial systems, the city is paving the way for future regulatory changes in the country.
While specific details about supported payment providers and wallets have not been disclosed, local authorities have promised to provide further guidance before the program is fully rolled out later this year. This forward-thinking approach to crypto adoption solidifies Panama City’s position as a regional pioneer in embracing blockchain technology and decentralized finance.
As Panama City leads the way in crypto adoption, it sets a positive example for other cities and countries looking to modernize their financial systems and embrace the future of digital currencies. With the potential to revolutionize public finance and expand access to decentralized payment options, Panama City is at the forefront of the evolving landscape of cryptocurrency integration.