Next year, Detroit will become the largest U.S. city to accept crypto payments for taxes and fees.
This feat will be accomplished with the assistance of PayPal, which will handle the crypto payments and convert them into U.S. dollars. Detroit will not hold any digital assets, as all conversions will take place before funds are received by the city.
“They are trying to be innovative, and accepting a variety of payments should make it easier for citizens to pay taxes and fees,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “However, by receiving all payments in dollars, the excitement ends there. If at the federal level there are strategic bitcoin or other cryptocurrency reserve plans, it will be interesting to see if cities like Detroit will follow suit.”
An Invitation to Technologists
In a phone interview with the Detroit Free Press, Detroit’s Treasurer, Nikhil Patel said that the city was concerned about the volatility of crypto, which is why Detroit decided to convert all payments immediately. Despite those apprehensions, the city is forging ahead with its crypto ambitions, a movement that has been spearheaded by its mayor.
“His conception was to send a signal to the rest of the world, frankly, that Detroit is the place where we want to invite technologists to build, to create, to develop,” Patel said. “And from my perspective as treasurer, my goal is to make it as easy as possible and as efficient as possible for people to make payments.”
A Key Force
To enhance this efficiency, Detroit is also considering alternate ways for residents to pay taxes and fees, including digital platforms like Venmo. The city’s support for crypto payments is set to launch mid-next year, with initial options including payments via bitcoin, Ethereum, Lightcoin, and PayPal’s PYUSD stablecoin.
Cryptocurrences have emerged as one of the key forces that are driving the payments industry. To meet the growing demand, Colorado and Louisiana already allow their residents to pay taxes using digital assets. While there are some U.S. cities, such as Miami Lakes, FL, that support crypto payments, Detroit would be the largest to do so by far.