Bitcoin Grows in Popularity in Lugano, Switzerland
Shops and eateries in the picturesque city of Lugano, Switzerland, are increasingly embracing bitcoin as a form of payment. At a lakeside McDonald’s, a customer inquires about paying for his coffee with bitcoin, only to be presented with a terminal designed for cryptocurrency transactions. This device, distributed at no cost to local businesses by the city government, allows customers to make contactless payments directly from their bitcoin wallets. The customer’s order totals 0.00008629 bitcoin, approximately $8.80.
While many bitcoin holders view the digital currency primarily as a speculative investment rather than a medium for everyday purchases, Lugano is pioneering a different approach. In this Italian-speaking region of Switzerland, in addition to the Swiss franc, around 350 local shops and restaurants now accept bitcoin. The municipal government has even initiated cryptocurrency payments for services, such as preschool childcare.
A Bitcoin Enthusiast’s Perspective
During my visit to McDonald’s, I spoke with Nicolas, a French resident who passionately advocates for bitcoin. He appreciates the autonomy it provides, freeing users from traditional financial systems laden with intermediaries and associated fees. Nicolas has also come across bitcoin gift cards in Switzerland, allowing users to purchase a set amount in Swiss francs and convert it into bitcoin for use in a digital wallet.
Strolling through Lugano’s high-end shopping district, I stopped at Vintage Nassa, a boutique selling both new and second-hand luxury items. The shop’s owner, Cherubino Fry, explained his decision to accept bitcoin is primarily due to lower transaction fees compared to credit cards. While bitcoin transaction fees typically hover below 1%, credit card fees can soar as high as 3.4% depending on the issuer and country. However, Fry admitted that the volume of bitcoin transactions remains low, suggesting it may take time for its use to grow. “Like a tree, it will take time to flourish,” he remarked, envisioning a brighter future for cryptocurrency acceptance in the next decade.
Plan B Initiative Promotes Bitcoin Education
Nearby, I visited the Plan B initiative, established in 2022 by the Lugano government in partnership with the cryptocurrency platform Tether. The initiative aims to educate citizens about cryptocurrency and position Lugano as a central hub for bitcoin in Europe. Mir Liponi, director of Plan B, shared an experiment she conducted in July when a banking issue left her unable to access her funds for 11 days. During this period, she relied exclusively on bitcoin for transactions, successfully managing to navigate most of her needs, despite some limitations such as public transportation and energy bills.
Liponi envisions a future where circular economies thrive, allowing residents to earn, hold, and spend bitcoin seamlessly. However, the adoption of bitcoin as a mainstream currency has not been without challenges. For instance, El Salvador’s 2021 decision to make bitcoin legal tender alongside the US dollar has seen mixed results, with many citizens opting to convert their bitcoin into dollars instead of utilizing it for transactions. Conversely, cities like Ljubljana and Hong Kong have successfully fostered environments conducive to cryptocurrency use.
Public Sentiment and Skepticism
Despite the excitement around bitcoin in Lugano, not everyone is convinced of its merits. A statue commemorating Satoshi Nakamoto, the enigmatic figure credited with creating bitcoin, was recently vandalized and discarded into Lake Lugano. Lucia, a local resident, noted the unusual nature of such vandalism in an otherwise peaceful city, expressing her own skepticism about cryptocurrencies. She cited concerns surrounding their association with criminal activity and volatility, leading to significant financial losses for some investors.
Sergio Rossi, an economics professor at the University of Fribourg, warned of the risks associated with bitcoin for local businesses. He emphasized the need for shopkeepers to swiftly convert bitcoin into fiat currency to mitigate exposure to its unpredictable value. Rossi also highlighted potential reputational risks tied to cryptocurrencies often linked to illegal activities. He stressed the importance of security in digital transactions, noting that unlike conventional bank deposits, cryptocurrencies are not insured, making them susceptible to loss if a digital wallet platform fails.
City Officials Remain Optimistic
When asked about the possibility of Lugano attracting illicit financial activities, Mayor Michele Foletti expressed confidence. He remarked that both fiat and bitcoin can be used for good or bad purposes, suggesting that traditional cash is more attractive for money laundering due to its anonymity. Foletti remains optimistic about the potential benefits of bitcoin for Lugano, citing the establishment of 110 crypto-related companies in the city as a positive sign for its future.
