Detroit residents will be able to pay taxes in cryptocurrencies. How will this happen?
Last week, the head of the Florida Department of Finance, Jimmy Patronis, proposed adding Bitcoin to the state’s pension plans. In his opinion, cryptocurrencies are definitely not going anywhere anymore, well, and allocating part of the funds to crypto investments will have a positive impact on the funds’ returns. The popularisation of digital assets in the US does not end here. Detroit will become the largest American city in which residents will be able to pay taxes and make other similar payments in popular coins.
In recent years, there have been many stories in the US that have confirmed the growing popularity of digital assets. For example, Miami Mayor Francis Suarez is positioning the city as a cryptocurrency-friendly hub, which also led to the launch of the MiamiCoin project.
New York City Mayor Eric Adams converted his first salary in office into Bitcoin and Etherium, while in September 2022, Colorado became the first state to allow taxes to be paid using digital assets. This is done with the participation of third-party intermediary payment platforms.
New York City Mayor Eric Adams
Utah then joined the initiative. Among the fresh examples it is worth remembering Louisiana, where crypto this autumn this year allowed to use to pay for some public services.
Next in line will be Detroit. And it will turn out to be the largest in the United States with support for such a feature.
Where you can pay taxes in crypto
The relevant initiative was reported by the city authorities. From the middle of 2025, local residents will be able to pay taxes and other city fees in popular digital assets like Bitcoin and Etherium through the PayPal platform.
The crypto will be converted into dollars before being deposited into local service accounts. In general, this is common practice when using coins to pay for goods and services, because in this way companies and organisations are not dependent on the volatility of digital asset rates.
PayPal’s PYUSD stablecoin logo
Here is a rejoinder on the matter from the city’s mayor, Mike Duggan. She is quoted by The Block.
Detroit is creating a tech-friendly environment for new opportunities for residents and entrepreneurs. We are excited to be one of the first major U.S. cities to explore civic applications of blockchain and enable the use of cryptocurrency as a payment method.
PayPal has supported interactions with cryptocurrencies since October 2020. It was initially limited as US residents were able to hold BTC, ETH, BCH and Litecoin in their accounts without withdrawing them.
The platform then added a coin withdrawal feature and the ability to use them to pay for goods and services. Finally, in August 2023, the company introduced its own dollar-based PYUSD stablecoin, after which in April 2024 users were able to use it for overseas payments.
PYUSD’s capitalisation surpassed the billion dollar level in the second half of August 2024. This was helped in part by the launch of the stablecoin on the Solana network, where the cryptoasset appeared following the initial launch on Efirium.
The number of active addresses that interact with PYUSD stablecoins, by month
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The new product is part of Detroit’s strategy to explore intonation technologies to improve public services and increase economic growth.
Treasurer Nikhil Patel commented on the news. He emphasises that crypto will prove to be a good alternative to the banking system, which many residents still lack access to.
The new payment platform will expand options for Detroiters who want to use cryptocurrency. But most importantly, the system upgrade will make electronic payments more accessible to everyone. And also for those who don’t yet have a bank account.
It is funny that such an innovation was announced immediately after the victory of Donald Trump and the Republicans in general in the US elections. The latter will represent the majority in Congress, and therefore primarily determine the course of development of the state. And since the representatives of this party are predominantly good to crypto, experts expect a positive for the coin sphere - and including the growth of Bitcoin to 100 thousand dollars by the end of the year.
Newly elected U.S. President Donald Trump
As of 2020, Detroit was home to around 630,000 people, making it the 26th most populous city in the US. Meanwhile, in the 1950s, it ranked fourth with a population of 2 million.
The innovation was evaluated by Justin Onwenu, head of the Detroit Department of Business and Economic Opportunity. According to his version, payment in digital assets will simultaneously increase the transparency of city processes.
His replica is cited by Decrypt.
This innovation underscores our willingness to change and our commitment to making Detroit a place where bold ideas and entrepreneurship take hold. Blockchain technology is paving the way for greater accessibility, efficiency, transparency and security, and we look forward to hearing from the innovators who are implementing these changes.
Cryptocurrency market growth
The initiative of the Detroit authorities is both pleasing and surprising. Still, in essence, its representatives directly stated that cryptocurrencies can be useful to residents who do not have access to the banking sector. And such positioning of coins at the official level will clearly benefit the sphere of digital assets.
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