Detroit is set to become the first major U.S. city to accept cryptocurrency for taxes and other city fees, top officials from the city said in a Thursday press release.
What Happened: Residents would have the option to use cryptocurrencies to pay for utilities through a secure platform managed by PayPal (NASDAQ: PYPL). This initiative was part of a broader strategy to tap blockchain technology to enhance public services and boost civic engagement in the city.
"Detroit is fostering a technology-friendly environment that empowers residents and entrepreneurs," said Detroit Mayor Mike Duggan. "We are thrilled to be among the first major U.S. cities to explore blockchain's civic applications and offer residents the option to use cryptocurrency for payments."
The new payment option is projected to be available by mid-2025, Treasurer Nikhil Patel added. The city would also encourage blockchain innovators to propose their ideas for civic applications to Justin Onwenu, Detroit's first Director of Entrepreneurship and Economic Opportunity.
In a note shared with Benzinga, Patel said that payments could be made in cryptocurrencies that are accepted by PayPal Crypto, including Bitcoin, Ethereum, Litecoin, and the new PayPal stablecoin, PayPal USD.
Williston in North Dakota and Miami Lakes in Florida are the cities that accept cryptocurrencies for utility bill payments, while Colorado and Utah allow their residents to pay state taxes using digital assets.
Why It Matters: Detroit's move to accept cryptocurrency payments aligns with the state of Michigan's growing interest in cryptocurrencies.
According to a recent SEC filing, the Michigan State Pension Fund invested $10 million in Grayscale Ethereum Trust ETF (NYSE: ETHE), the largest Ethereum exchange-traded fund (ETF) as of this writing.
In doing so, it surpassed its $7 million allocation in Bitcoin ETFs.
Earlier in May, the University of Michigan's endowment increased its investments in cryptocurrency, following the footsteps of Harvard and Yale. The university invested in a crypto fund from Andreessen Horowitz, indicating a growing acceptance of digital currencies among large funds and endowments.