Panama City Officially Signs with One of the Biggest Local Banks to Process Tax Payments in Bitcoin
Panama City has officially signed an agreement with Towerbank to enable crypto payments for municipal services, including taxes, fees, and permits.
This move marks a significant step forward in the city’s adoption of digital currencies. Residents will soon be able to pay using Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC), and Tether (USDT).
A Step Toward Crypto Adoption
Panama City’s mayor, Mayer Mizrachi, explained that his team’s decision to push for crypto payments stemmed from the inability to pass a proposed Crypto Law last year. Realizing that legal barriers could slow progress, the team sought an alternative approach.
The result was the partnership with Towerbank, a key player in Panama’s financial sector. Through this collaboration, the city can now accept crypto payments without requiring new legislation, making the process simpler and more efficient.
Panama City has made #Bitcoin history. The city has officially signed with one of the biggest local banks to process tax payments in crytpo 🚀
With a dollarized economy, strong banking system and adoption of Bitcoin Panama will continue to be the Financial Capital of Latam 🇵🇦… pic.twitter.com/9cZDFiVto1
— Mayer Mizrachi (@Mayer) April 23, 2025
According to Mizrachi, the system is simple: although public institutions are required to accept payments in U.S. dollars, Towerbank serves as an intermediary. When residents pay in cryptocurrency, Towerbank instantly converts those funds into fiat, ensuring compliance with existing regulations.
Towerbank’s Role in the Innovation
Towerbank’s involvement is crucial to this project’s success. The bank’s support enables Panama City to process crypto payments securely and legally. According to Mizrachi, without institutions like Towerbank, Panama risks falling behind in the evolving financial landscape.
Furthermore, Towerbank’s forward-looking stance allows Panama City to bypass bureaucratic hurdles that prevent such changes. The city’s banking system’s flexibility enables it to function as a testing ground for crypto integration in municipal payments.
This agility, Mizrachi suggests, provides Panama with a competitive advantage in the region, positioning it to be a leader in digital finance.
Global Trend Toward Crypto Payments
Panama City’s decision is part of a growing global trend of municipalities and states exploring the use of cryptocurrency for tax payments. Notably, the U.S. state of Colorado began accepting crypto for taxes in 2022, instantly converting the digital assets to fiat.
Similarly, in December 2024, the Canadian city of Vancouver voted to explore the integration of Bitcoin into its financial systems, including tax payments, as part of its “Bitcoin-friendly city” initiative.
Other global cities, such as Lugano in Switzerland, have also adopted crypto for paying taxes and fees, further demonstrating the increasing acceptance of digital currencies at the municipal level.
