By
Chimamanda U. Martha
April 25th, 2024
The southern city of Lugano is collaborating with Tether to become a major European crypto hub by speeding up crypto adoption.
Lugano, a city in the southern part of Switzerland, is adopting crypto as payment for taxes, goods, and services. According to reports, citizens of the Italian-speaking province will be able to use Bitcoin (BTC) as legal tender. Citizens will also be able to use USDT and LVGA as official currencies in settling debts.
For this initiative, the city of Lugano is partnering with USDT-issuer Tether Operations Limited, the platform powering the world’s largest stablecoin by market cap. Intending to make Lugano a major blockchain hub, both partners have established a Center of Excellence for Blockchain Adoption.
More Insight into the Lugano Crypto Project
Speaking at “Lugano’s Plan B,” an event specifically orchestrated toward the realization of the city’s crypto dream, Tether’s CTO Paolo Ardoino weighed in. According to him, the platform has established a 3 million-Swiss franc fund in collaboration with Lugano city officials towards crypto adoption. Furthermore, the CTO also explained that the city sought to prove a point by authorizing BTC, Tether, and Lugano’s own LVGA for transactions. In an address at the event on Thursday, Ardoino said:
“We want to show that these tools, these instruments, these currencies that were created can actually be put to work in a [locally-controlled] vibrant environment like the city of Lugano.”
In addition, the Tether CTO also stated that Lugano was looking to lure talent from the crypto space to its city.
Using the Lightning Network
Further offering insight into the collaborative initiative, Ardoino said Tether and Lugano have plans to specifically implement the Lightning Network. This implementation has become necessary to overcome scalability hurdles of Lugano’s crypto city infrastructure. The Lightning Network is a layer-2 solution for the Bitcoin blockchain that allows off-chain transactions. A notable example of this is transactions between parties not on the blockchain network.
Lugano residents will use crypto for parking tickets, public services, and tuition fees for students. The city also expects more than 200 entities in the area to officially accept crypto payments. Ultimately, Lugano aims to see digital currencies uniformly accepted like fiat currency, as payments for all goods and services.
Crypto in El Salvador
Lugano’s crypto ambition is similar to that of Central American country El Salvador which took effect last year. Late last year, the country’s president Nayib Bukele declared BTC as legal tender. This move essentially made El Salvador the first nation in the world to use a digital currency as legal tender. Since then, the Central American country has doubled down on its commitment to widespread institutionalization of the leading crypto. These include mining the tokens from volcanoes, and planning a dedicated “Bitcoin City” at the foot of these volcanoes. Furthermore, El Salvador is known to increase its BTC holdings by repeatedly “buying the dip” during market downturns.