Lugano’s commitment and ambitious vision for Bitcoin and blockchain
For a few years now Zug and Zermatt have been accepting Bitcoin for tax payments (2020 Swissinfo article), but these efforts were not really communicated widely and they have not really caught on much (2022 Swissinfo article).
We now see Lugano joining the list of Bitcoin and blockchain-friendly regions in Switzerland. On March 3rd during their “Plan B” conference, Lugano unveiled a much more ambitious vision of a city inextricably tied to a DeFi (decentralized finance) and P2P (peer-to-peer) mentality.
You can see the city’s commitment to blockchain in Mayor Foletti’s public announcement (Plan B event live feed min 10:23) and Dir. of EconDev Pietro Poretti’s participation (min 23:35)
Lugano already has its own stablecoin, the LVGA “luga” (pegged to 1/100th of CHF) which can already be purchased through their MyLugano app, by first performing the full KYC and picking your MyLugano card (for residents) or MyLugano pass (for visitors). Most importantly there are already 100s of businesses in Lugano that accept LVGA and also give LUVA cashback rewards for consumption. It is important to note that LVGA transactions have 0 fees for the merchants.
Dir. Poretti (min 52:11) also lays out how Lugano plans the broader acceptance of Bitcoin, Tether (a USD pegged stablecoin), and LVGA for a multitude of official city payments beyond just a limited yearly amount of taxes (as we have seen in other cantons or cities).
It is still unclear how Ticino & Lugano will consider the tax treatment of holding BTC. Will it continue to be seen as an asset?- the current status in CH is that an individual holding BTC reports capital gains on it. Or will they move towards a currency view? — as is the case in El Salvador, where BTC (purchase, holding, and transfer) is not considered any different than holding or paying with CHF — the market value of the BTC (at the end of the year) would only count towards wealth tax, as any CHF savings account would.
