Detroit to Become Largest U.S. City Accepting Crypto for Taxes

Detroit is set to accept cryptocurrency for tax payments and other municipal fees.

On Nov. 7, Detroit’s Office of the Treasury unveiled plans to support crypto payments, targeting a rollout by mid-2025.

The city will leverage PayPal’s payment platform, enabling residents to use supported digital assets to settle various city taxes. The supported digital assets are Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and PayPal’s PayPal USD stablecoin.

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

Detroit’s embrace of cryptocurrency payments is part of a broader strategy to attract blockchain and technology firms.

The city is also inviting blockchain entrepreneurs to pitch ideas to Justin Onwenu, Detroit’s director of entrepreneurship and economic opportunity, as part of an initiative to promote civic projects working on bolstering transparency, improving data security, and streamlining public services.

“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,” said Onwenu.

Prospective applicants have until Dec. 15 to submit their proposals via email.

Detroit’s announcement came just one day after Donald Trump was elected as the 47th President of the United States on a pro-crypto platform.

A Growing Trend in Crypto Tax Payments

Detroit’s move follows in the footsteps of other U.S. jurisdictions.

In September 2022, Colorado became the first state to accept cryptocurrency for tax payments. However, Colorado has processed just 72 crypto tax payments worth $56,510.

The states of Utah, Florida, South Dakota, and Louisiana have all begun accepting crypto as payment for government services since.

In 2018, the state of Ohio launched OhioCrypto.com, enabling businesses to pay 23 types of taxes with Bitcoin, converted to dollars via BitPay. However, the program was shut down in 2019 after the Ohio Attorney General ruled it lacked proper authorization and violated bidding procedures.

Similar proposals in Arizona, California, and New York did not receive regulatory approval.

U.S. Pension Funds Warm Up to Crypto Investments

While U.S. states and cities increasingly accept cryptocurrency for taxes, pension funds are now making investments in crypto ETFs.

A May 14 SEC filing revealed that Wisconsin's state pension fund has purchased $163 million worth of spot Bitcoin ETF shares.

On Nov. 4, the State of Michigan Retirement System revealed it acquired $11.1 million worth of Ethereum ETF shares, following a $6.6 million worth of Bitcoin ETF shares in July.

Florida is also exploring options to add crypto exposure to its state retirement fund. On Oct. 30, Florida’s Chief Financial Officer, Jimmy Patronis, urged the State Board of Administration to assess the feasibility of adding digital assets to its retirement fund.