tl;dr Summary: The Swiss City of Lugano has announced ambitious plans to become a major European blockchain hub, with Bitcoin and USDT to be accepted as legal tender. The announcement was made in conjunction with Tether Operations Limited, and continues a growing trend of mainstream crypto adoption worldwide.
The Swiss City of Lugano has announced plans to accept BTC and USDT as legal tender. Mayor Michele Foretti revealed the news at the city’s ‘Plan B’ event on Thursday. The event was hosted in partnership with Tether Operations Limited, issuer of the $USDT stablecoin. A picturesque lakeside town at the foot of the Swiss Alps, Lugano acts as the economic capital of southern Switzerland. It is the ninth-largest city in Switzerland, with a population of 62,000. The announcement came as part of a host of crypto-friendly proposals, with the city aiming to become a major European blockchain hub.
This is not Lugano’s first venture into the crypto space. Last year the city implemented its own EVM-compatible blockchain called 3Achain, complete with digital wallet, as well launching the ‘LVGA’ stablecoin. LVGA is pegged to one-hundredth of a Swiss franc, and residents are currently able to earn rewards in the token for participating in city loyalty schemes. As part of the ‘Plan B’ announcement, LVGA will also be accepted as legal tender across the city alongside $BTC and $USDT.
Lugano is not the only area in Switzerland to announce pro-crypto regulation, with residents in other areas of the country already able to pay taxes in Bitcoin and Ether. The ‘Plan B’ announcement of Lugano goes much further however, with public services such as parking, waste management and tuition fees all able to be paid in crypto. The city is aiming to develop infrastructure for private businesses to easily join the scheme, enabling a fully-functional blockchain-based economy.
The plan also carries a focus on business development and education. A specialized business hub is to be set up, with over 100 million Swiss Francs available to foster blockchain-based start-ups that wish to relocate to the city, and a further 3 million Swiss Francs available to drive blockchain adoption amongst local businesses. A specialized curriculum on Bitcoin and the lightning network is also to be developed in local universities, with 500 student grants available to encourage blockchain education in the region. Lugano will hope to solidify its status as a leading European player in the crypto-space by hosting the ‘Bitcoin World Forum’ in October 2022.
The Mayor was joined by City Director Pietro Poretti and Tether CTO Paolo Ardoino for the live-streamed event. Ardoino made reference to the increases in tourism and GDP reported in El Salvador after Bitcoin adoption, highlighting the team’s aspirations by stating, “Imagine what we can do in a city at the centre of Europe.”
El Salvador became the first nation to adopt bitcoin as legal tender in September 2021. President Nayib Bukele is adamant the move has been a great success, drawing on favorable GDP and tourism statistics, however recent warnings from the International Monetary Federation urge caution. Despite this, other nations are expected to follow El Salvador’s lead in 2022, with Tonga and Mexico topping the list of countries set for crypto adoption.
Even with increasing threats of regulation from the Biden administration, Bitcoin adoption is gathering pace within the US also. The start of 2022 has seen a wave of pro-crypto regulation from US states, with representatives from Arizona and California tabling bills for Bitcoin to be accepted as legal tender. More recently, the state of Colorado has announced definitive plans to accept cryptocurrency as payment for tax bills, although no fixed timeline exists for the system to come to fruition.
It is clear that worldwide adoption of cryptocurrency shows no sign of slowing down, with Lugano just the latest in a long line of examples. Investment firm Fidelity have likened the adoption process to ‘high stakes game theory’, with large actors feeling increasing pressure to acquire digital assets. Fidelity state that even if they do not necessarily believe in the investment thesis, nations do not want to miss out on the huge economic advantage that the ‘first movers’ like Lugano and El Salvador will benefit from if the crypto space continues to prosper, so are acquiring digital assets as a ‘hedge’ position.
Now, anyone for a holiday to Lugano?
