Introduction to Lugano’s Bitcoin Ecosystem
The city of Lugano, Switzerland, has been making waves in the financial world with its innovative approach to cryptocurrency adoption. The streets of Lugano are now home to a unique experiment where Bitcoin is being used as a functional currency, allowing residents and tourists to pay for everything from everyday items to municipal taxes. This approach has been made possible through the “Plan ” initiative, a partnership between the city of Lugano and Tether, launched in 2022.
Key Insights into Lugano’s Bitcoin Adoption
One of the key factors driving the adoption of Bitcoin in Lugano is the significant reduction in transaction fees. Traditional credit card processors in Switzerland can charge merchants over 3% per transaction, whereas Bitcoin payments via the Lightning Network often cost less than 1%. This has led to a voluntary participation from merchants, with over 350 businesses already on board. Residents can pay municipal bills, including taxes, parking fees, and tuition fees, in BTC or USDT using standard QR code invoices.
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Adoption is voluntary, with merchants participating due to lower transaction fees.
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Residents can pay municipal bills in BTC or USDT using QR code invoices.
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The city balances the ecosystem using BTC for payments, USDT for stability, and LVGA as a local loyalty token.
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The city has no volatile crypto assets, as payments are instantly converted into Swiss francs (CHF) via Bitcoin Suisse.
The Vision Behind Plan
Plan was not designed as a marketing stunt but as a structural overhaul of the city’s financial rails. The approach is quintessentially Swiss: voluntary, highly organized, and focused on reducing friction for traders. The ecosystem is built on three pillars: Bitcoin (BTC) for sovereign value, Tether’s USDt (USDT) for price stability, and the LVGA token, a local stablecoin that powers a city-wide loyalty program.
The Merchant Experience and Organic Growth
For local store owners, the transition to crypto is driven by the bottom line. With traditional credit card processors charging high fees, Bitcoin payments offer a cost-effective alternative. The city has distributed free smart POS terminals powered by GoCrypto to over 350 merchants, making it easy for them to accept crypto payments. A local shop owner described the transition as an organic process, with the infrastructure in place for mass adoption.
The Circular Economy
The MyLugano app is the operational backbone of Lugano, providing a tangible “how-to” for everyday life in the city. Users can pay with crypto at participating local stores and receive up to 10% cashback in LVGA tokens. These tokens are pegged to the Swiss franc and are accepted for city services, public parking, and even childcare fees, creating a self-perpetuating cycle.
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Users receive up to 10% cashback in LVGA tokens for crypto payments.
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LVGA tokens are accepted for city services, public parking, and childcare fees.
Governance of the Blockchain through Taxes and Fines
Lugano is one of the few places in the world where all municipal bills, from property taxes to traffic tickets, can be paid with Bitcoin or Tether. The process is remarkably mundane, with an invoice coming with a standard Swiss QR code. The resident scans it with a wallet, confirms the exchange rate, and the debt is paid off, reducing the administrative burden on the local treasury.
Institutional Infrastructure and the 2025 Milestone
The momentum behind Plan reached a new peak in October 2025 during the fourth annual Plan Forum, attracting a record 4,000 participants from 64 countries. This growth reflects increasing institutional interest, with Lugano issuing its fifth digital bond on SDX, the SIX Digital Exchange, demonstrating that blockchain infrastructure extends beyond retail payments to sophisticated municipal debt markets.
The Skeptical Manager’s Risk Perspective
However, not everyone in Lugano is a believer. Local critics, including university students and some academics, remain cautious, citing concerns about custody risk. In Switzerland, traditional bank deposits are protected by government guarantees, whereas crypto assets held in digital wallets do not benefit from the same protections.
Blueprint for the Future
Lugano’s experiment suggests that large-scale Bitcoin integration may depend less on ideology and more on practical user interfaces. By focusing on three specific workflows, the city has created a repeatable model for communities worldwide: providing merchants with free hardware, making crypto usable for everyday obligations, and using a local loyalty token to maintain value circulation.
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Provide merchants with free hardware to eliminate the “entry fee” for adoption.
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Make sure the currency can be used for everyday obligations like taxes and not just discretionary purchases.
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Use a local loyalty token to maintain the circulation of value within the city.
For more information, visit Cointelegraph.
