Starting next year, Detroit residents will be able to pay their taxes and other city fees using cryptocurrency, the city announced on Thursday. Detroit is set to become the largest U.S. city to do this.
The city says that the transactions will happen through a secure platform managed by PayPal. The city says this change is part of a larger strategy to "explore innovative technologies that could enhance public services, strengthen civic engagement, and foster economic growth."
The city did not list an exact date as to when this would go into effect, just saying that the payment option will be available in "mid-2025" according to city treasurer Nikhil Patel.
“Detroit is building a technology-friendly environment that empowers residents and entrepreneurs," Detroit Mayor Mike Duggan said. “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 city jumped on the idea after a resident, Daniel Easterly, recently brought it up during a community meeting.
“I'm not so surprised. I'm more grateful in the sense of me being able to say something and my voice being heard in this way,” Easterly said.
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For nearly 10 years, Easterly has been investing in cryptocurrency and is now an entrepreneur in blockchain technology.
“Why would you pay with your cryptocurrency? Because cryptocurrency hedges against inflation, right? A big part of cryptocurrency is you have the ability to fractionally invest in that currency,” Easterly said.
"This really has been generated by community request,” Duggan said.
“It was always an option in the back of our minds as the payment platform evolved, but yes, a resident came to us at one of the mandated community charter meetings," Patel said.
Patel says Easterly’s suggestion sparked a discussion as the city was rolling out a new platform to pay city taxes this summer. They quickly added an option to pay with cryptocurrency, like Bitcoin, becoming the largest U.S. city to do so.
“Once that platform is fully implemented, you'll be able to go online. And just like checking something out from Amazon, you'll have options to pay with credit card, checking account and PayPal. PayPal cash or PayPal with crypto,” Patel said.
Timothy Bates is a professor of practice at the University of Michigan-Flint College of Innovation and Technology and feels the option will especially benefit residents working in tech.
"I paid for my deck through blockchain through Lowes," Bates said. "If you are making money through crypto and trading and you can pay taxes with it, that benefits that citizen where they may not have a job in the real world that pays that kind of money.”
Although the payment will be crypto, the city is not investing in the currency. Instead, PayPal will convert the payment into U.S. dollars.
“The city is not going to manage the risk of the ups and downs of the crypto market," Duggan said. 'It gets converted to dollars when you pay on PayPal.”
“The primary risk we wanted to figure out was the market volatility risk of the cryptocurrency and of course as the mayor mentioned, it will settle all completely in dollars, so the city is not taking on any volatility risk,” Patel said. "We've been on a good 10-year run with great fiscal and financial management, so that wasn't really a consideration."
Instead, they see this move as an investment in attracting and retaining young talent, encouraging tech entrepreneurs to build in Detroit.
“Our biggest export in Michigan isn’t cars, it's young people," Duggan said. "This really bubbled up with young people saying why doesn't Detroit get with the latest technology?”
“I want people to think that Detroit is ready for business, for creativity, for entrepreneurship,” Patel said. "For all the young people around the country that recognize on the coast where the cost of living is higher than it is here, come build. Come create in Detroit.”
“Detroit is changing right? And there's so much potential here and it's about the Detroiters showing the rest of the world what we actually have to offer," Easterly said.
To go along with this payment chain, the city is inviting blockchain entrepreneurs to pitch their ideas for block chain civic applications to Justin Onwenu, the city's first director of Entrepreneurship and Economic Opportunity.
Anyone interested in sending a proposal to Onwenu can email them to pitchdetroit@detroitmi.gov by Dec. 15 of this year.
As of November 2024, only three U.S. states accept cryptocurrency for state payments — Colorado, Utah and Louisana.
This story was originally published by Brett Kast and Kellen Voss at Scripps News Detroit.
