Shops and Restaurants in Lugano Embrace Bitcoin Payments
In the picturesque city of Lugano, Switzerland, local businesses are increasingly adopting bitcoin as a payment method. At a McDonald’s situated by a serene lake, a customer inquires about using bitcoin for his coffee order. The staff presents a device resembling a credit card terminal, which is, in fact, a cryptocurrency payment machine. This technology has been provided at no cost to local businesses by the municipal government. The customer completes his transaction via contactless payment from his bitcoin wallet, with the total amounting to approximately $8.80 (£6.60).
While many bitcoin investors typically view the cryptocurrency as a speculative asset rather than a medium of exchange, Lugano presents a unique scenario. The city, located in the Italian-speaking region of Switzerland, offers residents and visitors the option to pay with bitcoin at around 350 shops and dining establishments. Furthermore, the local government has begun accepting cryptocurrency for various municipal services, including childcare payments.
Bitcoin: A Symbol of Financial Freedom
During my conversation with Nicolas, a customer from France, he expressed his belief in the benefits of using bitcoin. He highlighted the sense of autonomy it provides, allowing users to bypass traditional financial systems laden with intermediaries and fees. Nicolas also mentioned bitcoin cards available in Switzerland, which function as prepaid gift cards that can be loaded with bitcoin after purchasing them in Swiss francs.
As I explored Lugano’s bustling high street, known for its luxury retail offerings, I visited a boutique named Vintage Nassa, where the owner, Cherubino Fry, shared his reasons for accepting bitcoin. He noted that the transaction fees for bitcoin payments are typically lower than those charged by credit card companies—generally under 1% for bitcoin compared to 1.7% to 3.4% for debit and credit cards, respectively. However, Fry admitted that while interest exists, actual bitcoin transactions remain infrequent, stating, “For now, only sporadically, only some clients. But using bitcoin will be like a tree growing, and this tree will grow very big in five, 10 years.”
Plan B: Promoting Cryptocurrency Education
Not far from Fry’s store, I visited the headquarters of Plan B, an initiative launched in 2022 in partnership with the cryptocurrency platform Tether. The program aims to inform the public about cryptocurrencies and to position Lugano as a leading European center for bitcoin. Mir Liponi, director of the Plan B hub, recounted a personal experiment where, due to a banking issue, she was solely reliant on bitcoin for 11 days. She found that living on bitcoin in Lugano was feasible for most purchases, although she noted gaps in availability for services like public transportation and dental care.
Liponi envisions a future where local economies operate in a “circular” fashion—where individuals can earn, retain, and spend bitcoin seamlessly. However, she acknowledged that other regions with similar initiatives have faced challenges. For instance, after El Salvador adopted bitcoin as legal tender alongside the US dollar in 2021, many citizens exchanged their initial bitcoin for dollars and rarely utilized the cryptocurrency thereafter.
Global Perspectives on Bitcoin Adoption
Despite the setbacks seen in places like El Salvador, there are examples of successful bitcoin integration globally, such as Ljubljana, Slovenia, recognized as the world’s most crypto-friendly city earlier this year, followed closely by Hong Kong and Zurich. In Lugano, however, sentiments about bitcoin are mixed. A statue commemorating Satoshi Nakamoto, the pseudonymous creator of bitcoin, was vandalized and discarded into Lake Lugano, an unusual occurrence in the typically peaceful city.
Local resident Lucia remarked on the incident, noting it was surprising given the general decorum of the community. She expressed her own skepticism towards cryptocurrencies, associating them with crime and financial speculation, particularly highlighting concerns about individuals losing money during market downturns.
Economic Risks and Concerns
Sergio Rossi, an economics professor at the University of Fribourg, warned that the volatility of bitcoin poses risks for merchants in Lugano and beyond. He emphasized the necessity for businesses to convert bitcoin transactions into stable fiat currencies immediately, to mitigate exposure to price fluctuations. Rossi also pointed out the potential reputational risks associated with cryptocurrencies, particularly in light of their use in illicit activities.
Moreover, he cautioned consumers about the risks of relying on digital wallets, as the loss of access to such platforms can result in permanent loss of funds—contrasting this with the security of traditional bank deposits, which are protected up to a certain limit in Switzerland.
City Leadership’s Stance on Bitcoin’s Impact
In a discussion with Lugano’s Mayor Michele Foletti, I inquired about concerns regarding the city becoming a haven for illicit financial activities. Foletti dismissed such fears, stating that both fiat and bitcoin can be used for lawful or unlawful purposes. He noted that cash remains the preferred medium for criminals engaged in money laundering, not bitcoin. The mayor remains optimistic about the positive implications of bitcoin for Lugano, pointing out that 110 crypto-related companies have established operations in the city, suggesting a growing acceptance of digital currencies in the local economy.
