The Panama City Mayor Mayer Mizrachi announced on April 15 that the Panama District municipality will become the first in the nation to accept cryptocurrency as a form of payment for services. The decision follows a unanimous approval by the City Council.
According to Mizrachi, the new payment system will operate through an authorized bank that will handle the conversion of cryptocurrency payments into U.S. dollars for the Mayor’s Office. This mechanism aims to streamline the process and mitigate potential volatility associated with digital assets for the municipality’s finances.
“My dear City Council has unanimously approved an initiative initiated by the Mayor’s Office, which will allow all citizens to pay their obligations and taxes in crypto,” Mizrachi explained, highlighting the significance of this decision.
The mayor further stated that Panama, often considered Central America’s financial hub, was lagging behind in adopting this modern payment method. He clarified the legal framework, stating, “Legally, it’s simple: the Mayor’s Office receives dollars, but there’s an intermediary who receives the crypto, transforms it into dollars, and takes it to the Mayor’s Office.”
Mizrachi indicated that a formal announcement with further details will be made once the agreement with the partnering bank is finalized. He emphasized the broader implications of this decision, stating, “This allows for the free movement of cryptocurrencies throughout the economy and throughout government.”
Besides positioning itself as Latin America’s crypto hub, Panama introduced a draft bill aiming to regulate cryptocurrencies and establish a legal framework for blockchain-based services. The bill outlines licensing requirements for Virtual Asset Service Providers (VASPs) to register with Panama’s Financial Analysis Unit (UAF) and adhere to know your customer and anti-money laundering regulations.
If passed, this legislation could provide greater legal clarity and consumer protection while fostering innovation in Panama’s digital economy.
Source:news.bitcoin.com
