- J Markezic and M Bacina
Swiss city makes crypto legal tender
Switzerland's eighth largest city, Lugarno, has announced that it will make bitcoin legal tender, allowing its citizens to pay for public services or taxes in Bitcoin. Lugano is not the first jurisdiction to declare cryptocurrency as legal tender, with El Salvador announcing this in September 2021. The announcement follows Lugano's prior engagement with 200 organisations to propel the implementation of bitcoin and lightning network payments.
Along with Bitcoin, Lugano has a partnership with Tether permitting the US backed stablecoin USDT to be legal tender in Lugano as well. Lugano city director, Pietro Poretti said:
Lugano is the economic capital of southern Switzerland and has always been a leader in the creation of new opportunities... [c]ollaborating with a company the caliber of Tether is a magnet that will attract more companies to come to Lugano.
The implementation plan - referred to as Plan ₿ - will see a physical venue in the heart of Lugano that will serve as the nerve-centre for Bitcoin and blockchain startups that seek to establish operations in the city.
Lugano is within the Ticino canton of Switzerland - which is ranked eighth in terms of its gross regional product - and is likely banking on the fact that the city's economic activity will increase, as El Salvador's did with Tether's CTO Paolo Ardoino asserting that El Salvador's gross domestic product increased by 10% and tourism increased by 30% after declaring Bitcoin legal tender.
Plan ₿ will also see two investment funds being created, the first of which will allocate more than USD$3 million to encourage the take-up of Bitcoin, USDT and LVGA - the city's very own stablecoin. The second fund will comprise more than USD$108 million for Bitcoin and blockchain start-ups that seek to relocate operations to Lugano.