The city of Lugano, the economic capital of Italian-speaking southern Switzerland, is accepting cryptocurrencies for tax payments as part of a new collaboration with stablecoin provider Tether (USDT).
Tether Operations Limited, the blockchain-based platform that backs USDT, the world’s largest stablecoin by market capitalization, has signed a partnership agreement with the Lugano administration, according to a joint announcement released Thursday.
Tether and the City have established a Blockchain Implementation Center of Excellence with the goal of becoming a major European blockchain hub.
The collaboration intends to showcase real use cases for blockchain, applying it practically in the local community, including accepting payments in cryptocurrencies and experimenting with blockchain solutions on a city scale. Tether and the city are specifically planning to implement the Lightning Network, the second layer added to the Bitcoin (BTC) blockchain, to overcome the scalability barriers of their cryptocurrency city infrastructure.
Lugano is looking to expand its efforts to allow citizens and businesses to pay taxes in cryptocurrencies in the near future, pending several official approvals and infrastructure projects. The ultimate goal is to accept cryptocurrency to pay for all goods and services, equating it with fiat currency, the announcement notes.
As part of the partnership, Tether will also create a multi-million dollar fund to help fund blockchain-based startups and blockchain services in the region. In addition, Tether will bring its expertise and support from the City of Lugano to provide industry education through collaborations with local universities and research institutes.
According to Lugano Mayor Michele Foletti, the latest partnership with Tether will help the city further expand its fintech efforts and development. He mentioned that the city of Lugano has been actively involved in cryptocurrency and blockchain technology in recent years, including work on LVGA Points citizen payment tokens, non-fungible tokens, and other blockchain developments, stating:
“Lugano is investing in its future. In recent years, we have already implemented blockchain-based solutions, including the MyLugano app and its LVGA Points payment token, the Lugano digital franc and the 3Achain blockchain infrastructure.”
The news comes as the city of Lugano and Tether are hosting a live event on Thursday to celebrate the city’s adoption of the cryptocurrency, as announced last week.
#bitcoin and stablecoins are revolutionizing the financial sector. #tether and the city of Lugano @luganomycity are teaming up to make Lugano the Bitcoin Capital of Europe. Every city needs a plan. Join the Lugano plan ₿ pic.twitter.com/wmhFVePcPo — Tether (@Tether_to) February 21, 2022
Related: Colorado Governor Says He Expects State To Accept Crypto Tax Payments By Summer
As previously reported, there are a number of cities and cantons in Switzerland that allow their residents to pay taxes in cryptocurrencies, including the Swiss canton of Zug and the municipality of Zermatt.