Detroit to soon allow tax payments in cryptocurrency

Detroit is set to make history as the largest U.S. city to accept cryptocurrency payments for taxes and municipal fees.

This initiative was announced by city officials and will launch in mid-2025 through a secure platform managed by PayPal. Detroit Mayor Mike Duggan emphasized the city’s commitment to technological advancement during the announcement.

“Detroit is building a technology-friendly environment that empowers residents and entrepreneurs,” Duggan stated. He also added that they are excited to be one of the first major U.S. cities to explore blockchain’s civic applications.

New tax system will benefit crypto holders and traditional users

City Treasurer Nikhil Patel detailed the implementation strategy, highlighting the broader implications for financial inclusion. “The Treasurer’s Office is committed to modernizing our payment channels and processes to enhance the customer experience and improve internal operational efficiency,” Patel explained.

The new system aims to benefit both crypto holders and traditional users. Patel emphasized that the platform upgrade will particularly assist unbanked residents by providing more accessible electronic payment options. Alongside the payment system announcement, Detroit has launched an open call for blockchain innovators to propose civic solutions.

Justin Onwenu, the city’s first Director of Entrepreneurship and Economic Opportunity, will lead this initiative. Interested entrepreneurs have until December 15, 2024, to submit their proposals. The city requires comprehensive submissions detailing solution descriptions, stakeholder analysis, cost projections, and risk assessments.

Detroit follows a growing trend of crypto adoption

Detroit’s move follows a growing trend of cryptocurrency adoption in U.S. government operations. Currently, only three states – Colorado, Utah, and Louisiana – accept cryptocurrency for state-level payments. Colorado pioneered state-level crypto payments in September 2022. They enabled residents to settle various tax obligations using crypto. Utah followed suit with a similar program, while Louisiana began accepting crypto payments for specific state services in September 2024.

Several smaller cities have already implemented cryptocurrency payment systems. Cities like Williston, North Dakota, utilize BitPay for utility bill payments, and Miami Lakes, Florida, process town service payments through PayPal’s crypto feature.

Notable larger cities have shown interest but haven’t implemented payment systems. Miami, despite positioning itself as a crypto hub and launching MiamiCoin, doesn’t accept crypto payments. Similarly, New York City, even with Mayor Eric Adams’ public support for cryptocurrency, has yet to implement crypto payment options.

Detroit’s cryptocurrency payment system is scheduled to launch in mid-2025, coinciding with broader improvements to city payment services. The initiative will process payments through PayPal’s platform. This will also ensure secure transactions and immediate conversion to U.S. dollars.

The system will enable residents to use cryptocurrency for property taxes, municipal fees, city service charges, and various permit and license fees. Detroit’s initiative represents a major step in municipal cryptocurrency adoption. This could likely set the precedent for other major U.S. cities considering similar programs.

Especially now with the pro-crypto Donald Trump being elected as the US president, the country could witness major changes in the crypto sector.