Key Insights
Participation is voluntary. Merchants engage because Bitcoin Lightning fees are usually below 1%, compared to the approximate 3% average charged by credit card networks.
Residents can settle municipal bills, such as taxes, parking fines, and tuition, in BTC or USDT via standard QR-code invoices.
The city maintains a balanced ecosystem by utilizing BTC for transactions, USDT for stability, and LVGA as a local loyalty token.
The city refrains from holding volatile crypto assets. Payments are instantly converted into Swiss francs (CHF) through Bitcoin Suisse, reducing the city’s exposure to crypto price fluctuations.
The cobblestone streets of Lugano, Switzerland, are more famous for their Mediterranean-style piazzas and upscale boutiques than for significant economic changes. However, a closer look at storefronts along Via Nassa reveals that the familiar “Visa” and “Mastercard” stickers now have a new companion: a vibrant yellow “Plan ₿” sticker.
In this lakeside haven, Bitcoin has evolved from a mere digital asset stored in a cold wallet to a functional currency used to purchase everything from a morning espresso to a Big Mac and even to pay municipal tax bills.
The Vision for a Decentralized Plan ₿
Inaugurated in 2022 through a collaboration between the City of Lugano and Tether, Plan ₿ was created not as a promotional stunt but as a fundamental redesign of the city’s financial systems.
While nations like El Salvador have implemented top-down Bitcoin mandates, Lugano’s strategy is characteristically Swiss: voluntary, meticulously organized, and centered on minimizing merchant friction.
The ecosystem is based on three foundational elements: Bitcoin (BTC) for sovereign value, Tether’s USDt (USDT) for price stability in larger transactions, and the LVGA token, a local stablecoin that supports a city-wide loyalty initiative.
The Merchant Experience and Organic Growth
For local businesses, the shift to crypto is driven more by economic benefits than ideology. Traditional credit card processors in Switzerland can charge merchants over 3% per transaction. In contrast, payments made using Bitcoin via the Lightning Network, a layer-2 protocol enabling instant, low-fee transactions, often cost less than 1%.
One local store owner views the transition as a natural evolution. It’s “like a tree growing,” he shared with the BBC. “This tree will grow very big in five to ten years.” While crypto payments currently represent a small portion of his everyday sales, the framework is already established, awaiting the “mass” in mass adoption.
To facilitate this shift, the city distributed complimentary smart POS terminals, provided by GoCrypto, to over 350 merchants. These devices handle the technical intricacies. The merchant inputs the price in Swiss francs (CHF), the customer scans a QR code, and the merchant can opt to receive the settlement immediately in CHF to avoid volatility or keep the crypto.
The Circular Economy
Lugano’s operational backbone is the MyLugano app. Here, the “how-to” of daily life in the city materializes.
Users paying with crypto at participating local shops earn up to 10% cashback in LVGA tokens.
These tokens are not merely digital points. They are pegged to the Swiss franc and are accepted for city services, public parking, and even childcare fees.
This creates a self-sustaining loop. A tourist might purchase a luxury watch in USDT, gain LVGA cashback, and then use that “digital change” to pay for a boat ride across Lake Lugano. By retaining value within these digital transactions, the city decreases its dependence on certain traditional banking fees, ensuring more transaction value remains within the local economy.
Governance on the Blockchain through Taxes and Fines
Perhaps the most revolutionary aspect of Lugano is how residents engage with the state. Lugano is among the few locations worldwide where all municipal invoices, from property taxes to parking tickets, can be settled using Bitcoin or Tether.
The procedure is surprisingly straightforward, which is precisely the point. An invoice arrives with a standard Swiss QR code. The resident scans it with a wallet, confirms the exchange rate, which is secured for a short period to prevent slippage, and the debt is paid. The city’s administration describes this as a “complete automation” of financial flows, decreasing the administrative load on the local treasury.
Institutional Infrastructure and the 2025 Milestone
The momentum behind Plan ₿ reached a high point in October 2025 during the fourth annual Plan ₿ Forum. The event attracted a record 4,000 participants from 64 nations, marking a 140% increase in attendance since the initiative’s launch. This growth is not solely about tourism; it signifies a deeper level of institutional interest.
In 2025, Lugano further solidified its position by issuing its fifth digital bond on SDX, the SIX Digital Exchange, illustrating that blockchain infrastructure encompasses more than just retail transactions but also sophisticated municipal debt markets.
The city has also attracted more than 110 crypto-focused startups relocating to the area, enticed by the regulatory clarity offered under Switzerland’s FINMA framework.
The Skeptical Manager’s View on Risk
Nonetheless, any thorough analysis must acknowledge existing friction. Not everyone in Lugano is fully convinced. Local skeptics, including university students and some academics, have expressed concerns. Their primary worry isn’t the technology itself but rather custodial risk.
In Switzerland, traditional bank deposits are safeguarded by state-backed guarantees. Conversely, crypto assets stored in digital wallets lack the same protections. “If the platform hosting my digital wallet fails or declares bankruptcy, my cryptocurrencies vanish,” cautions Sergio Rossi, an economics professor at the University of Fribourg.
Moreover, while the technical infrastructure may be fully established, “psychological adoption” remains a generational hurdle. Many residents still perceive Bitcoin primarily as an investment rather than as a currency for exchanges.
A Blueprint for the Future
Lugano’s initiative suggests that widespread Bitcoin integration may rely less on ideology and more on practical user experiences. By concentrating on three specific processes, the city has developed a replicable model for municipalities globally:
Distribute free hardware to merchants to eliminate the “entry fee” for adoption
Allow the currency to be used for essential obligations such as taxes, not merely for optional purchases like luxury items
Implement a local loyalty token to promote value retention within the city.
As the world observes central bank digital currencies (CBDCs) with a blend of curiosity and caution, Lugano showcases an alternative model: a city exploring the potential of private, decentralized, and stable digital assets, positioned as a counterpart to government-issued digital currencies.
