Panama operates a unique monetary system where the US dollar (USD) is the official and most widely used currency for all transactions. In fact, paper money in Panama is entirely made up of US dollar bills.
In addition to the dollar, Panama issues its own coins called the Balboa. These coins are pegged 1:1 with the US dollar, meaning they have exactly the same value and can be used interchangeably in everyday purchases.
For travelers, this system is extremely convenient. If you’re coming from the United States, you don’t need to exchange currency. Even if you’re visiting from another country, using USD simplifies transactions, as prices are listed in dollars and widely understood.
It’s worth noting that while both Balboa coins and US coins circulate, you will not find Balboa paper bills in use.