Switzerland has long been known for its financial innovation, and the city of Lugano is now leading a new frontier: everyday cryptocurrency payments. Once a quiet lakeside town, Lugano has transformed into one of Europe’s most progressive hubs for digital finance through its bold Plan B initiative launched in 2022. Today, over 15% of Lugano’s residents use the Swiss franc-pegged stablecoin LVGA for daily transactions — including grocery shopping, dining out, and even paying taxes.
This remarkable shift isn't just symbolic; it reflects a growing global trend toward digital wallets, decentralized finance, and blockchain-based public services. With more than 400 merchants already accepting crypto payments and plans to expand to 2,000 within a few years, Lugano is setting a real-world example of how cities can integrate cryptocurrencies into mainstream economic life.
The Birth of Plan B: Building Europe’s Bitcoin Capital
In 2022, the city of Lugano — home to around 63,000 people — partnered with Tether, the issuer of the world’s most widely used stablecoin USDT, to launch Plan B, an ambitious strategy aimed at positioning the city as “Europe’s Bitcoin Capital.” The project introduced three key digital assets as de facto legal tender:
- Bitcoin (BTC)
- Tether (USDT)
- LVGA, a Swiss franc-backed stablecoin issued by the city itself
While not replacing the Swiss franc, these cryptocurrencies are now officially accepted for tax payments, public service fees, and private-sector transactions. This hybrid model allows citizens to enjoy both the stability of fiat currency and the flexibility of blockchain technology.
The backbone of this system is a platform developed in collaboration with Bitfinex, which supports instant Bitcoin payments via the Lightning Network and issues USDT and LVGA on the Polygon blockchain — chosen for its low fees and high transaction speed. Users simply scan a QR code on their bills or receipts and select their preferred digital wallet to complete the payment.
15% of Residents Now Use LVGA Daily
According to a recent report by Cointelegraph, more than 15% of Lugano’s population regularly uses LVGA for daily purchases such as:
- Paying utility bills
- Buying groceries
- Dining at restaurants
- Subscribing to online services
This adoption rate is among the highest for municipal-backed digital currencies globally. The success stems from strong government support, user-friendly infrastructure, and targeted education campaigns that demystify cryptocurrency for average citizens.
Local businesses have also benefited. Over 400 shops, cafes, and service providers now accept crypto payments, with many reporting increased customer engagement and faster transaction settlements compared to traditional card processors.
Lugano officials project that the number of crypto-friendly merchants will grow tenfold in the coming years, reaching 2,000 by 2026. This expansion could make crypto payments as common as contactless cards or mobile wallets like Apple Pay.
👉 Learn how stablecoins like LVGA are bridging traditional finance and Web3 ecosystems.
Why Stablecoins Matter: Financial Inclusion Beyond Borders
While crypto payments are still in early stages globally, Lugano’s experience highlights a critical advantage: financial accessibility. In many developing regions, over half the adult population remains unbanked. For example:
- In sub-Saharan Africa, over 52% of adults lack bank accounts
- In contrast, only 6% of U.S. adults are unbanked
Digital assets offer a solution. With just a smartphone and internet access, individuals can store value, send money, and participate in the global economy — all without needing a traditional bank.
Stablecoins like LVGA and USDT play a central role because they combine the borderless nature of crypto with price stability tied to real-world currencies. This makes them ideal for daily spending, salary disbursements, and cross-border remittances.
A 2022 survey found that 36% of respondents would accept partial or full salary payments in cryptocurrency, a figure expected to rise as regulatory clarity improves and user confidence grows.
The Road to Global Adoption: Key Milestones
Cryptocurrency’s journey from niche technology to mainstream acceptance has accelerated in recent years. One pivotal moment came in January 2024, when the U.S. Securities and Exchange Commission (SEC) approved the first batch of spot Bitcoin ETFs. This decision marked a turning point in the legitimization of digital assets.
For ordinary users, ETF approval signaled that crypto is no longer just for tech enthusiasts or speculative traders — it's becoming part of the established financial system. As institutional investment increases, so does public trust in blockchain-based tools and services.
Lugano’s Plan B aligns perfectly with this shift. By integrating crypto into civic life — from tax collection to small business payments — the city demonstrates how governments can lead innovation while maintaining control and transparency.
Frequently Asked Questions (FAQ)
Q: What is LVGA?
A: LVGA is a stablecoin pegged 1:1 to the Swiss franc, issued by the city of Lugano in partnership with Tether. It operates on the Polygon blockchain and is designed for everyday transactions.
Q: Can anyone use LVGA outside Lugano?
A: While LVGA was created for local use, anyone with a compatible digital wallet can technically hold or transfer it. However, its primary utility remains within Lugano’s ecosystem of merchants and public services.
Q: Is using crypto to pay taxes common elsewhere?
A: Currently, few cities accept cryptocurrency for tax payments. Besides Lugano, places like Miami (USA) and Zug (Switzerland) have experimented with crypto taxation, but none have achieved the same level of integration.
Q: How secure are crypto payments in Lugano?
A: Transactions using LVGA and USDT on Polygon are secured by blockchain cryptography. Additionally, users control their funds through private wallets, reducing reliance on third-party intermediaries.
Q: Does using crypto eliminate transaction fees entirely?
A: No system is fee-free, but blockchain payments — especially on Layer-2 networks like Polygon — typically cost far less than credit card processing or international wire transfers.
Q: Could other cities replicate Lugano’s model?
A: Yes. The combination of public-private partnerships, user-friendly tech infrastructure, and clear regulatory frameworks makes Lugano’s approach highly replicable for forward-thinking municipalities worldwide.
👉 See how emerging financial technologies are empowering cities and individuals alike.
Looking Ahead: The Future of Digital Payments
Lugano’s success shows that cryptocurrency adoption doesn’t require revolution — it can happen incrementally through practical applications. As Juniper Research predicts, digital wallet usage will reach 75% globally by 2025, driven by mobile banking, e-commerce growth, and rising trust in digital assets.
The integration of crypto into everyday life — from salaries to shopping to tax filing — represents the next phase of financial evolution. And with stablecoins offering stability, speed, and inclusivity, they may become the bridge between traditional finance and the decentralized future.
Lugano isn’t just embracing change — it’s shaping it. As more cities observe its progress, we may soon see a wave of urban centers adopting similar models, turning what was once experimental into standard practice.
For individuals, this means greater control over personal finances. For governments, it offers new tools for transparency and efficiency. And for the global economy, it opens doors to broader participation and innovation.
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