The Swiss City of Lugano Set to Accept Cryptocurrency as Legal Tender

This week at Lugano’s Plan B event, the city’s key figures got together to discuss progressive policy decisions and made the announcement that the Swiss city would now recognize cryptocurrency as legal tender.

Specifically, Bitcoin (BTC), Tether (USDT), and Lugano’s own LVGA Points tokens would be the first to be recognized as de-facto currencies. Pietro Poretti, director of the City of Lugano, noted that this decision was approximately 18 months in the making. The city has formulated a well-thought-out plan which started taking root in late 2020 when they began experimenting with blockchain technology and cryptocurrency payments by establishing a loyalty program that utilized its proprietary points token called LVGA which was built on Lugano’s own Proof-of-Authority blockchain.

Poretti went on to add that the decision was driven by Lugano’s history of being early adopters of technological developments. “Lugano is the economic capital of southern Switzerland and has always been a leader in the creation of new opportunities”, he said. 

The city decided to partner directly with Tether and adopt its stablecoin, USDT, as legal tender alongside Bitcoin and LVGA. The CTO of Tether, Paolo Ardoino, was even in attendance for the event. The city hopes that collaborating with a company like Tether will be a magnet to attract more companies to come to Lugano, and they didn't stop there.

In collaboration with Tether, the city will create a $100 million fund aimed at incentivizing start-ups to relocate their headquarters to Lugano. Tether will also help in the creation of a massive start-up hub at the center of Lugano that will host events and tech start-ups from around the world. Ardoino went on to name Polygon as its main infrastructure partner in facilitating stablecoin payments in Lugano.

Polygon (MATIC) is currently the second-largest network hosting Tether’s USDT stablecoin behind only Ethereum. However, Polygon’s low latency, high scalability, and low cost are touted as ways to enable seamless settlements of all USDT payments in the city in order to successfully reach the scale of adoption Lugano will need as it expects explosive growth.

According to Poretti, there has already been a widespread effort to bring cryptocurrency payments to the public sector as citizens are allowed to pay virtually all public services in cryptocurrency including personal/municipal taxes, document issuance fees, and access to public infrastructure just to name a few. When addressing adoption within the private sector, Poretti stated that so far over 200 businesses have installed the infrastructure necessary to accept payments in BTC, USDT, and LVGA and that over 5,000 citizens of Lugano have made payments using the city’s LVGA payment token while interacting with the digital wallet on a regular basis.

In closing, Tether’s CTO Paolo Ardoino went on, to sum up, his company’s stance on the partnership by saying, “This is not a marketing ploy. It is a set of concrete steps to make Lugano the blockchain capital of the world.”

All of this comes less than 6 months after El Salvador became the first sovereign nation to announce the adoption of Bitcoin as legal tender. These recent moves made by Lugano, Switzerland seem to be the latest domino to fall in a trend that will likely see many more countries and cities around the world follow in their footsteps over the coming months and years.