Among supporters of the cryptocurrency, the news was received as long-awaited proof that bitcoin has entered the financial and economic mainstream.
It’s even given regulatory approval to two “crypto banks” – Seba Bank and Sygnum – the former based in Zug, a small town just south of Zurich, whose chocolate-box medieval streets are home to about half of Switzerland’s 1,000 or so crypto start-ups.
Lugano, though, doesn’t just want to challenge Zug’s title as the “Crypto Valley” of Switzerland, Foletti says in an interview in his extravagant, Palazzo-style city hall.
“Crypto people are nomadic and tribal,” Ardoino tells me, pointing to the emergence of blockchain hubs elsewhere in the Americas and Asia: in El Salvador, Miami, Dubai, Singapore and Hong Kong.
Ardoino’s belief in bitcoin and cryptocurrency as a force for good is genuinely palpable.
We want to show that crypto can bring a huge benefit to local communities … If you create a place where people can spend in their preferred cryptocurrencies, they will all travel there.
Tether is convening two funds: a 100 million Swiss franc investment pool for blockchain start-ups, intended to coax the great and the good in the industry to make Lugano their home; and a 3 million franc fund for local businesses and merchants, which will help them transition to the new, crypto-powered economy.
The highest-profile supporter to date is Polygon, the digital platform behind the MATIC cryptocurrency, which is preparing to relocate three of its subsidiaries and a significant number of employees to the Swiss city.
“I see that if the people come to Lugano – if they work on the blockchain – then they will build our community.
Details of the scholarships are still being finalized with Lugano’s three universities, but Foletti says they’ll encompass a broad range of courses – both existing and new – that will be tailored to the needs of a rapidly expanding blockchain marketplace.
Plan B’s carrot-over-stick approach will, instead, give shops three options: do nothing; accept a free crypto-enabled Point Of Sale payment terminal from the local government; or wait for their existing POS operator to upgrade their system in support of cryptocurrency.
The city launched its loyalty program-styled cryptocurrency in the early stages of the Covid-19 pandemic, seeking both to give a helping hand to local consumers – purchases from participating shops and restaurants come with 10% cashback in LVGA – and to encourage more hygienic cashless payments.
Future payments in bitcoin and Tether will not attract 10% cashback, but the concept has nonetheless opened retailers’ eyes: highlighting potential savings of 2-3% on debit card fees, as well as the scope for innovating digital rewards schemes.
Including Lugano’s 50 or so banks in that list might seem odd.
“We have been and we will continue to be helpful to the banks here,” Ardoino insists.
“It’s not about leaving the banks behind.
In October, Lugano will host the inaugural Bitcoin World Forum, a conference bringing together leaders in the cryptocurrency industry – and, no doubt, showing off what’s been achieved so far under Plan B.
The next article in this four-part series about Switzerland’s emerging role as a bitcoin and blockchain hub will be my interview with Päivi Rekonen, chairwoman of Seba Bank.