A Swiss City Sends Bitcoin, Crypto Fans to The Moon – TheStreet

The Russian war in Ukraine and the international economic sanctions it is generating have shone a spotlight on the uses of cryptocurrencies. 

If the influx of crypto donations is seen as an important moment in the future acceptance of this industry, observers prefer for the moment to focus on permanent cases than on exceptional situations.

Enter the Swiss city of Lugano. 

This municipality of 62,000 inhabitants announced Wednesday that it will make bitcoin a legal tender. 

This means that it will indeed accept the payment of local taxes in bitcoin and stablecoin tether, as part of a partnership signed with Tether.

“The memorandum of understanding signed between Lugano and Tether will encourage the adoption of blockchain technology a local level and will allow the citizenry to pay taxes and fees for all services in Bitcoin, Tether or stablecoin based on the Swiss franc,” the municipality said in a press release in Italian.

Stablecoins are cryptocurrencies pegged on fiat currencies which aim to keep crypto valuations stable.

“Together, the two partners will work for achieve the shared goal of increasing the city’s blockchain capabilities and promoting Lugano as a new hub for the adoption of the blockchain at a European level,” the statement said.

Build a Cryptocurrency Payment System

Lugano goes further than cities that often accept bitcoin as a means of paying taxes — it says its goal is to have all businesses using crypto for all transactions.

It thus joins the nation of El Salvador a an all-crypto, all the time fan, even if the country only authorizes transactions in bitcoin.

“The city aims to allow citizens and businesses to pay taxes, fees, goods and services provided by the public body also in cryptocurrency, accepting only bitcoin, tether, and some Swiss franc-based stablecoins,” Lugano said.

The city is planning to put in place a complete cryptocurrency payment system with the necessary infrastructure for local businesses wishing to integrate their existing payment services with bitcoin and stablecoin, it said.

Tether Ltd., the issuer of tether cryptocurrency stablecoins, did not hesitate to share the news on its Twitter account.

“BREAKING NEWS: #Bitcoin, #Tether & the City’s LVGA token will become de facto LEGAL TENDER in Lugano,” Tether Ltd posted.

Tether created its token, tether, in 2014 as a bridge between traditional banking systems and the nascent crypto market. It calls it a stablecoin, with its value pegged to fiat currencies and 100% backed by corresponding fiat assets, including U.S. dollars and euros and other currencies. 

It’s backed by an equal amount in cash, commercial paper, corporate bonds or other stores of wealth designed to protect investors from price swings, which limits volatility.

The announcement of Lugano’s legalization of bitcoin and tether unsurprisingly left crypto enthusiasts on social media elated.

“It’s more like dreams and desires. Although I always have part of the savings in the form of USDT,” posted one user referring to tether.

“If your government tells you not to buy #Bitcoin, buy more,” another commented.