Detroit to become largest city in US to accept cryptocurrency payments for taxes, other fees

2024
  • Residents will be able to pay with cryptocurrency beginning mid 2025
  • City invites blockchain innovators to partner on civic solutions

 

Detroit residents will soon have the option to pay taxes and other city fees using cryptocurrency through a secure platform managed by PayPal, City officials announced today. In doing so, Detroit would become the largest US city to accept cryptocurrency payments.

This innovative payment option is part of a larger strategy by the City to explore innovative technologies that could enhance public services, strengthen civic engagement, and foster economic growth. The initiative not only makes it easier for Detroit residents to transact with the City but also marks Detroit’s commitment to welcoming blockchain and technology entrepreneurs who want to make a difference in the city.

“Detroit is building a technology-friendly environment that empowers residents and entrepreneurs, said Detroit Mayor Mike Duggan. “We are excited to be one of the first major U.S. cities to explore blockchains civic applications and allow residents to use their cryptocurrency as a payment option.”

The payment option will become available in mid 2025 along with additional improvements to city payment services, said Treasurer Nikhil Patel.

“The Treasurer’s Office is committed to modernizing our payments channels and processes to enhance the customer experience and improve internal operational efficiency,” Patel said. “This new payment platform will increase accessibility for Detroiters who would like to use cryptocurrency; more importantly, the platform upgrade will also make it easier for Detroiters to make electronic payments – including those who may be unbanked.”

In addition to the cryptocurrency payment option, the City of Detroit invites blockchain entrepreneurs and innovators to pitch their ideas for block chain civic applications to Justin Onwenu, the City of Detroit’s first Director of Entrepreneurship and Economic Opportunity.  Through this open call for innovative blockchain applications, the City is particularly interested in projects that leverage blockchain’s potential for enhancing transparency, improving data security, and streamlining public services.

Blockchain entrepreneurs and innovators are invited to send proposals to [email protected] by December 15th, 2024. Proposals should include descriptions of the proposed solutions, potential stakeholders, costs, risks and should also outline how their ideas will improve city services and benefit city residents.

“This announcement represents our openness to new ideas and dedication to positioning Detroit as a place for entrepreneurs and bold ideas to thrive, said Justin Onwenu, City of Detroit Director of Entrepreneurship and Economic Opportunity. “Blockchain technologies have the potential to drive greater accessibility, efficiency, transparency, and security and we’re excited to hear from entrepreneurs at the forefront of this work.”

With this effort, The City of Detroit will become the largest US city to accept cryptocurrency as a form of payment for city fees and taxes. Furthermore, as of November 2024, only three US states (Colorado, Utah, Louisiana) accept cryptocurrency for state payments.

What is cryptocurrency?

Cryptocurrency is a digital currency that uses cryptography and a decentralized network to enable secure transactions without a central authority like a bank or government. Instead, cryptocurrencies use a public ledger called a blockchain to record and verify transactions across a network of computers. Each user has a public key for sending money and a private key for accessing their own crypto. Transactions are encrypted using the public key and can only be decrypted with the private key. 

Cryptocurrencies are difficult to counterfeit because of their use of cryptography. They also can offer privacy because users don't need to provide personal information to make purchases. They can also be irreversible, which can reduce the risk of fraud for merchants and potentially make commerce cheaper for customers. 

 

Additional Information

  • Miami: Under Mayor Francis Suarez, Miami has positioned itself as a crypto-friendly hub. The city introduced its own cryptocurrency "MiamiCoin" in collaboration with CityCoins. However, to this date, Miami does not accept cryptocurrency as a form of payment.
  • New York City: Mayor Eric Adams has expressed strong support for cryptocurrency, even converting his first paycheck into Bitcoin and Ethereum, however, the New York City does not currently accept cryptocurrency as a form of payment.
  • Cities currently accepting cryptocurrency-based payments
    • Williston, North Dakota: Williston accepts cryptocurrencies for utility bill payments. The city partnered with BitPay to facilitate these transactions.
    • Miami Lakes, Florida: Miami Lakes accepts cryptocurrency payments for town services, including permits and licenses. The town utilized PayPal's cryptocurrency payment feature to process these transactions.
  • Colorado: In September 2022, Colorado became the first state to allow residents to pay state taxes using cryptocurrency. Taxpayers can use digital currencies to settle various tax obligations, including individual income tax, business income tax, and sales and use tax. Payments are processed through a third-party service that converts cryptocurrency into U.S. dollars for the state.
  • ABC News- Colorado to become the first state to accept cryptocurrency as payment for taxes
  • Utah: Following Colorado's lead, Utah implemented a program enabling taxpayers to pay state taxes with cryptocurrency. Similar to Colorado, Utah utilizes a third-party processor to handle these transactions, ensuring the state receives payments in U.S. dollars.