Detroit To Allow Residents To Pay Taxes, City Fees In Crypto In Mid-2025

Detroit, the most populated city in Michigan, will soon allow its residents to pay for their taxes and city fees in cryptocurrency, marking a significant milestone in the journey of crypto toward broader adoption.

The initiative is part of the city's efforts toward embracing blockchain technology, cryptocurrencies, and broader tech projects that "want to make a difference" in Detroit.

Toward a Tech-Friendly Environment

In a press release Thursday, the city government said the development is part of a greater strategy to explore possibilities around innovative technologies that could improve public services for its residents. With the development, Detroit is poised "to become [the] largest city in [the] U.S." to accept crypto payments for taxes and other fees.

It also expects the initiative to enhance civic engagement and foster economic growth as more blockchain and crypto users utilize the innovative payments system.

"Detroit is building a technology-friendly environment that empowers residents and entrepreneurs," said Detroit Mayor Mike Duggan. He added that the city government is 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."

A Commitment to Modernizing Detroit's Payment System

Detroit's Treasurer Nikhil Patel said the Treasurer's Office is dedicated to ensuring that the city's payments channels and processes will move toward modernization.

"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," Patel added.

A 2020 study by the University of Michigan cited a 2019 report that revealed "one in four Detroiters is unbanked and owns neither a checking nor savings account." Furthermore, two-thirds of the unbanked Detroit households in the metro area "cited financial reasons" for their status.

The study highlighted that low-income consumers in the city want lower banking fees, and more convenience – two issues that crypto addresses.

Detroit Welcomes High-Tech Experts, Entrepreneurs

Aside from allowing crypto payments for city fees and taxes by mid-2025, Detroit has also called on "blockchain entrepreneurs and innovators" to pitch project ideas for Detroiters.

In particular, the city government wants to see projects "that leverage blockchain's potential for enhancing transparency, improving data security, and streamlining public services."

Justin Onwenu, the city's Director of Entrepreneurship and Economic Opportunity, noted that Detroit's open call for proposals represents the local government's "openness to new ideas and dedication to positioning Detroit as a place for entrepreneurs and bold ideas to thrive."

Michigan – An Emerging Pro-Crypto State

In rankings of the top "pro-crypto" states, Michigan doesn't come up. However, it recently made headlines in the crypto space after it disclosed holdings in crypto.

A recent Securities and Exchange Commission (SEC) filing showed that Michigan it has invested in spot Bitcoin exchange-traded funds (ETFs) and Ethereum ETFs. In particular, the state holds 110,000 shares of ARK—21Shares' BTC ETF, and collectively holds 920,000 shares of Grayscale's two ETH ETFs.

Senior Bloomberg ETF analyst Eric Balchunas said Michigan's move of exposing itself to more Ether than Bitcoin is a "pretty big win" for the Ethereum chain's native token.

Currently, the U.S. cities accepting cryptocurrency-based payments include Williston in North Dakota and Miami Lakes in Florida. Williston accepts cryptocurrencies for utility bill payments, while Miami Lakes accepts cryptocurrency payments for town services, including permits and licenses.

In September 2022, Colorado became the first state to allow residents to pay state taxes using cryptocurrency.