When El Salvador adopted Bitcoin as legal currency in September, there was a lot of excitement throughout the cryptocurrency community. This was a huge step forward for crypto and a sign of the potential future. Soon, crypto enthusiasts began to speculate about whether another country would soon follow.

Most believed it would be another country of low income, as weak currencies are often very vulnerable to changing market environments and high inflation. Perhaps Panama was the most popular, as they quickly announced a bill to legalize Bitcoin following El Salvador’s decision last year. Paraguay was another possibility, buoyed in part by their bill to regulate Bitcoin trading and mining before Christmas. However, all the top contenders appeared to be Latin American. Rumours of Honduras, Guatemala, and other countries circulated on Internet forums.

No one got it right. Yesterday, the winner was named as…Lugano, a small town in southern Switzerland.

With a population of 62,000, Lugano is the ninth largest city in Switzerland. It is a beautiful spot on Lake Lugano and looks just as idyllic as a Windows screensaver.

What does the crypto announcement signify?

Lugano has played it differently to El Salvador who was all in on Bitcoin. Tether and LVGA, a CHF stablecoin, have been declared legal tender by the Swiss city.

El Salvador’s Bitcoin bet is more significant and economically consequential than the one in Lugano. This doesn’t mean that this will not have an impact on Lugano.

Citizens are now able to pay taxes in crypto. This includes parking tickets, tuition fees, and public services. 200 businesses will also be able to accept payments for goods and services. While Bitcoin may not be on the same level as the Swiss Franc, it is interesting that stablecoins are now available for citizens.

El Salvador’s decision to adopt Bitcoin as legal currency was repeatedly criticized. Stablecoins are not subject to the same price restrictions as fiat. This gives citizens an additional option: you can hold your savings in stablecoins and farm yield on DeFi protocols, then transfer cash to pay your parking ticket. It’s possible now.

Criticism

People will complain about the move as a publicity stunt and pointless. In reality, there is nothing wrong with that. Here we are talking about a city of 62,000 in the middle of Europe, which never would have happened otherwise. What is the city to lose? This change is aimed at blockchain startups, crypto unicorns, and freelancers. However, even if the city sees a slight increase in tourism, it’s still a win.

As I mentioned above, the law’s scale is so small that it is unlikely to have any significant ramifications such as the claims of El Salvador’s skeptics. The IMF, which urged El Salvador last month to “narrow down the scope of Bitcoin law by removing Bitcoin’s legal tender status”, won’t be calling on the Lugano mayor’s office anytime soon. Switzerland won’t have any concerns about financial integrity, fiscal liabilities or protection of citizens (given El Salvador’s limited government resources).

Tether

Tether are in partnership with Lugano, with chief technical officer Paolo Lugano saying at yesterday’s Plan B event that the firm had fund of 3 million Swiss francs together with Lugano officials, in order to push the adoption of Bitcoin, Tether and the LVGA token. He reiterated the main goal, which was to make the city a vibrant blockchain hub in Europe.

It’s a great episode in the exciting world crypto and it will be fascinating to see if Lugano can attract traders, talent and businesses to their beautiful city.

Who will be the next?