on Monday evening, Several dozen retailers and businesspeople gathered in the blue-carpeted hall of a conference center in the Italian-speaking city of Lugano, Switzerland, to learn how to accept cryptocurrency payments. Paolo Ardoino, the chief technology officer of Tether, the company behind one of the world’s most popular stablecoins (a type of cryptocurrency whose price is pegged to that of real currencies like the dollar). Lugano’s general secretary, Robert Bregy, said merchants in attendance were “much more interested in these new types of payments than we expected”.
The meeting is part of Lugano’s Plan B initiative, launched in March 2022 in partnership with Tether, which aims to make the city a hub of crypto innovation. Aside from a series of investments in blockchain technology business and educational programs and the organization of industry events, the most notable element of the plan is that the city will accept bitcoin, tether and its own LVGA cryptocurrency as payment for municipal taxes and access to certain public services and events. The city also committed to encouraging and helping local businesses to voluntarily include those cryptocurrencies in their accepted payment methods (a tough sell, amid the current monumental collapse in the price of bitcoin).
The move was designed quite explicitly to attract tech talent, businesses and cryptocurrency owners to a city that – while boasting beautiful vistas and a relatively mild climate – still lags behind other parts of Switzerland in terms of economic growth. Bregy says the plan seems to have worked so far, as the city has been “besieged” by cryptocurrency companies, entrepreneurs and students looking to relocate there. Lars Schlichting, a lawyer at the Swiss law firm Kellerhals-Carrard who specializes in the crypto sector, says he is currently working with “at least 10 companies, which is much higher than usual”, all of which want to move to Lugano.
Ardoino says Plan B is a way to lay out a “red carpet” for businesses and cryptocurrency fans looking to flock to Lugano. But Tether itself will take center stage: Since the plan was announced, the company has been the de facto project manager of Lugano’s crypto capabilities, who exerts significant influence in shaping the city’s digital fortune.
Lugano now competes with the German-speaking canton (or state) of Zug, the Swiss region known for its crypto activity, which has been nicknamed “Crypto Valley” over time. Though small and sleepy, Zug has some of the lowest corporate tax rates in the country going for it — a factor that helped it attract several high-profile organizations in the crypto space, most notably the Ethereum Foundation. Zug also allows cantonal taxes to be paid in bitcoin or ether, Ethereum’s cryptocurrency.
Lugano’s plan appears to be pushing the boundaries further, extending crypto payment adoption to a wider range of public services, and generally integrating crypto more deeply into its economic fabric. Bregy says that while Zug’s appeal is primarily tax-driven, Lugano’s pitch is as “an ideal place to live, do crypto business and thrive.” He adds that the city’s tax rates will never drop to Zug’s level for the foreseeable future.
