Does Panama use the US dollar or the balboa?
Think of the balboa as a name for the dollar, not a second currency. Panama's Superintendency of Banks states that "the official currency of the Republic of Panama is the balboa, whose value is on a par with the United States dollar," and that the dollar "circulates freely" without restrictions in commercial and financial transactions.
In practice that means a menu reading B/.8.50 and a receipt reading $8.50 ask for the same amount. You pay with US notes, and a Panamanian 25-centésimo coin is worth exactly one US quarter. Nobody converts anything at the till.
Why Panama never printed its own notes
The arrangement is older than the Panama Canal. On 28 June 1904, months after independence from Colombia, Panama passed Ley 84 on the currency. Article 1 made the balboa the monetary unit, defined as a gold coin of 1.672 grams at 0.900 fineness. It then declared the US gold dollar and its multiples legal tender in Panama "at their nominal value, equivalent to one balboa."
A 1935 memorandum from Panama's legation in Washington, published by the US State Department's Office of the Historian, explains the reasoning. The unstable Colombian currency then circulating was unsuitable for the canal treaty payments. The new balboa had the same gold weight and fineness as the US dollar, so in the legation's words "the Dollar and the Balboa became one and the same thing."
The institutions followed the same logic. Banco Nacional de Panamá was founded by Ley 74 of 13 June 1904 as the Banco Hipotecario y Prendario, a state bank rather than a note-issuing central bank. The Superintendency notes that Panama's first banking law came only in 1970. The IMF's 2025 Article IV report still describes a country with no central bank and "no monetary or exchange rate policy instruments to absorb shocks."
For a visitor, the consequence is price stability in dollar terms. The same IMF report recorded consumer prices falling 0.2% year on year at the end of 2024. There is no balboa exchange rate to watch, and no risk of being handed an unfamiliar note.
What will be in your change
Panama mints coins, and they circulate alongside US coins. The laws that authorise them set sizes and weights matching US coins of the same value, so the two sit side by side in the till.
| Coin | Panamanian specification | US equivalent |
|---|---|---|
| Quarter (B/.0.25) | 5.670 g, 24.26 mm, copper-nickel clad on copper, per Ley 34 of 2014 | 5.67 g, 24.26 mm, per the US Mint |
| One balboa (B/.1) | 26.5 mm for the 2019 World Youth Day issue in the Banco Nacional catalogue | 26.49 mm dollar coin |
Many circulating coins carry commemorative designs. Ley 48 of 2010 ordered 8 million quarters carrying the national flag, and the 2014 law authorised six canal-centenary quarter designs. Both laws give the coins full legal tender status.
The coin most visitors notice is the one-balboa piece. La Prensa reported in November 2011 that it first circulated on 27 July 2011, that 40 million had been ordered from the Royal Canadian Mint, and that the coin had drawn complaints about its build quality.
You may also read about gold and silver balboa coins. Ley 99 of 2025 authorises proof-quality collector series from 2025 to 2029 with face values of B/.1, B/.20 and B/.50, in runs of a few hundred to 2,000 pieces. They are legal tender on paper, but they are sold as collectibles and are not what you will receive as change.
Can a shop refuse a $100 bill or a balboa coin?
Legally, no. Ley 34 of 2 August 2016 amended Article 36 of the consumer protection law. It obliges businesses to accept "coins or banknotes of any denomination, without requiring the consumer to show personal identification," as long as they are legal tender in Panama, and to give exact change.
That rule corrects two common assumptions. A cashier may not insist on your passport before taking a large note, and a shop may not reject a one-balboa coin just because it is Panamanian. The protection also has a limit: it covers only legal tender in Panama, meaning balboa coins and US dollars.
Cash, cards and arrival
Two thresholds matter at the border. The US State Department lists a US$10,000 currency threshold for both entry and exit. Visit Panamá, the Tourism Authority's site, says you declare only if you carry cash, objects or documents worth more than US$10,000, using the traveller's affidavit and its QR code.
The second threshold is proof of funds, and the official figures differ. The Tourism Authority, in guidance updated in July 2025, gives a minimum of US$500, shown by cash, credit card or other proof, with higher amounts for some nationalities. The UK Foreign Office, updated in December 2025, says at least US$1,000 or a credit card. A credit card satisfies both versions.
Cards also work on public transport. Metro de Panamá has accepted contactless debit and credit cards at its validators since 17 January 2023 at stations on Lines 1 and 2, with the Line 2 airport branch then due to follow, and presents the option as suited to tourists. The page does not list card brands or foreign-card terms, so test your card on the first tap.
A worked example: your last day
Say you pay B/.3.25 for a coffee with a US$5 note. Your change of $1.75 could arrive as a US$1 bill, a one-balboa coin in place of the bill, and three quarters of either origin. All of it is equally valid in Panama.
The difference appears when you leave. US notes and coins remain spendable in the United States and exchangeable elsewhere. Balboa coins are legal tender only in Panama, so spend them at the airport or on your final taxi, and keep US notes for anything you want to take home.