Detroit to Accept Crypto for Tax Payments in Bid to Spur Tech Innovation, Fuel Economic Growth

Detroit is set to become the largest U.S. city to accept crypto for tax and fee payments, an initiative aimed at positioning the city as a tech-friendly hub and fostering economic growth. 

Starting mid-2025, residents will be able to pay with popular cryptos like Bitcoin and Ethereum through a PayPal-managed platform, the city announced Thursday.

The payment option forms part of Detroit’s broader strategy to modernize municipal services and encourage financial inclusivity, particularly for residents with limited access to traditional banking. 

“Detroit is building a technology-friendly environment that empowers residents and entrepreneurs,” Mayor Mike Duggan said in a statement. “We’re excited to be one of the first major U.S. cities to explore blockchain’s civic applications.”

To minimize the risks of crypto price volatility, payments will be converted to U.S. dollars on PayPal before reaching city accounts. 

PayPal entered the crypto market in October 2020, announcing that U.S. customers could buy, hold, and sell various assets, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, directly through their PayPal accounts. The service was later expanded to the United Kingdom in August 2021. 

In August 2023, PayPal introduced its own U.S. dollar-backed stablecoin, PYUSD. In April, it began allowing its U.S. customers to tap PYUSD for payments abroad.

In addition to payment solutions, Detroit is inviting blockchain innovators to propose civic applications for the technology, per the statement. 

Justin Onwenu, Detroit’s Director of Entrepreneurship and Economic Opportunity, welcomed ideas that could improve transparency, security, and efficiency in city operations. 

“Blockchain technologies have the potential to drive greater accessibility and efficiency,” Onwenu said in the statement, adding that Detroit aims to be a destination for forward-thinking entrepreneurs.

Detroit’s move follows similar initiatives by other states, including Colorado, Utah, and Louisiana, where crypto payments are accepted for certain public services.