The eighth largest city in Switzerland, Lugano, has launched the Plan B initiative in 2022, aiming to establish itself as the “Bitcoin capital of Europe.” The city has achieved fruitful results, with over 15% of Lugano residents currently using the Swiss franc stablecoin LVGA for daily expenses, including tax payments.
With a population of approximately 63,000, Lugano partnered with Tether, the leading stablecoin issuer, in 2022 to announce the collaborative Plan B project, with the goal of transforming the city into the “Bitcoin capital of Europe.” Lugano has designated Bitcoin, USDT, and the locally issued Swiss franc stablecoin LVGA as de facto “legal payment currencies,” allowing residents to use these three cryptocurrencies for tax payments or to cover the costs of certain public goods and services. Local businesses have also been encouraged to accept cryptocurrency payments.
According to a report by Cointelegraph, Lugano has become a prime example of cryptocurrency consumption, with over 15% of the city’s residents using LVGA for daily bill payments, shopping at stores and restaurants, and utilizing online services. Paying bills with cryptocurrencies in Lugano is relatively easy, as residents only need to scan the QR code on the bill and select their preferred digital wallet for payment. Currently, Lugano has over 400 merchants accepting cryptocurrency payments.
This is made possible through the collaboration between the Lugano city government and Bitfinex. Bitfinex has developed a platform that supports Bitcoin’s Lightning Network payments and issues USDT and LVGA, which are consumed by citizens, on the Polygon blockchain. The city anticipates that the number of businesses supporting cryptocurrency payments will increase to 2,000 in the coming years.
Cryptocurrency payments are expected to become more widespread in the future. Juniper Research estimates that by 2025, the global usage rate of digital wallets will reach 75%. A study in 2022 revealed that 36% of respondents are willing to accept full or partial salary payments in cryptocurrencies, and these figures are expected to continue growing.
The report mentions that digital assets can provide improvements that traditional financial sectors cannot match. In developing countries, financial services are still a privilege for a minority of people, while in the United States, only 6% of adults do not have a bank account. However, in Africa, over 52% of adults do not have a bank account.
Regarding household payments, cryptocurrencies have not yet gained the same importance as traditional payment systems, but they are expected to become increasingly prevalent in the future. The most crucial step towards integrating cryptocurrencies into the financial industry was the approval and listing of the US Bitcoin spot ETF in January of this year. This represents the initiation of the legalization process for cryptocurrencies, allowing ordinary users to gain confidence in using them.
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