Bitcoin and Stablecoins for Payment of Tax, Goods and Services
In a bid to establish itself as a major hub for blockchain in Europe, Lugano is looking to encourage widespread cryptocurrency adoption across the city through an initiative called Plan B. According to a press release, BTC, USDT, and LVGA have been approved as payment options for taxes, goods and services in the near future, along with the Swiss Franc.
In addition, Lugano’s collaboration with Tether will see businesses across the city expand their existing payment methods to include Bitcoin and stablecoins. When Lugano citizens pay with crypto, it is immediately converted to fiat currency through a third party.
One of the solutions that the Swiss city is looking to utilize is the Lightning Network, a layer two technology that charges cheaper fees and enhances scalability. The partnership between both parties aims to put blockchain technology to practical use within local communities in Lugano.
Furthermore, as part of the partnership deal, Tether has pledged to create a multi-million dollar fund that would assist blockchain-based startups in the region. The stablecoin issuer is also planning to collaborate with local universities and research institutes to provide crypto and blockchain education while offering 500 scholarships in the immediate future.
Commenting on the latest development, Lugano’s mayor, Michele Foletti, said:
“We strongly believe in this technology, the potential to scale the technology. And our integrated collaboration with Tether will build a better and more open, transparent, and smart city.”
The CTO of Tether Paolo Ardoino, also said:
“As the world’s largest stablecoin, we envision a future where businesses of all sizes and scale are able to leverage blockchain platforms to improve the quality of life of local citizens providing more sustainable, transparent, and reliable financial and day-to-day services. We look forward to Lugano becoming a model for global adoption.”
Crypto Adoption Continues to Grow in Switzerland
The Plan B initiative by Lugano and Tether also seeks to use green energy for Bitcoin mining activities. According to the press release, promoting an environmentally friendly alternative will enable BTC to “act as a strong accelerator for renewable energy development.”
Lugano is also preparing to host the upcoming Bitcoin World Forum later in October 2022.
Meanwhile, Switzerland has always been seen as a major cryptocurrency hub. The Swiss City of Lugano is not the only region that is accepting crypto for tax payment.
Back in February 2021, the Canton of Zug allowed citizens to pay taxes in Bitcoin and Ether. However, what makes Lugano stand out is that the southern city is not only accepting crypto payment for taxes but also goods and services, making the region one of the first in the world to adopt a full cryptocurrency payment economy.
Lugano’s plan to make crypto a de facto legal tender is similar to the move made by El Salvador. The Central American country made history after President Nayib Bukele’s Bitcoin Law (making cryptocurrency legal tender) received a supermajority vote in the Salvadoran Congress in June 2021. The law was later implemented in September.