The "Plan B" in Lugano is being expanded through a deeper alliance with the leading stablecoin issuer, Tether. Among other things, the creator of USDT will operate a validation node for the Tessin city's own stablecoin, supporting Switzerland's blockchain infrastructure.
In March 2022, Lugano made the impressive move to accept Bitcoin as legal tender, following Zug as the second city in Switzerland to do so. The decision was expanded through a partnership with Tether and a comprehensive economic project also known as "Plan B." By supporting crypto-friendly initiatives, Lugano aimed to secure a prominent position in the emerging Crypto Valley.
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Tether supports Lugano stablecoin
Lugano's partnership with Tether allowed the city to develop its own stablecoin. Residents could now receive cashback in Luga (LVGA) when making payments through the official MyLugano app. The local stablecoin is pegged to the Swiss Franc and is based on the self-developed 3Achain. Recognized by FINMA as a payment token, LVGA can be used for purchases in Lugano but is not accepted in other parts of Switzerland. Additionally, LVGA cannot be traded against other currencies.
The underlying 3Achain blockchain is also a collaborative project involving public, private, and academic partners. The project describes itself on its website as "the institutional blockchain platform promoted by the City of Lugano." As part of the expanded alliance with Lugano, Tether will operate a validation node for the LVGA token blockchain, as indicated in a press release by the stablecoin issuer.
"Through the partnership with 3Achain, Tether ensures that Lugano continues to grow as a Bitcoin and blockchain hub in the region and has the necessary scalability and stability to leverage these opportunities." - Paolo Ardoino, CTO Tether
Will other regions in Switzerland follow suit?
In general, the four-year partnership signed in the spring of 2022 as part of the Plan B program aims to promote the adoption of blockchain technology in Lugano. To this end, the initiative established two investment funds with a combined $110 million to support Bitcoin adoption. Some successes have been achieved so far. According to Tether, over 350 local stores in the region accept Bitcoin and USDT as payment. Additionally, municipal payments like taxes and parking fees can be made using cryptocurrencies.
Furthermore, earlier this year, the Tessin city made history by issuing a digital bond based on blockchain technology. Just a month later, the Swiss National Bank accepted the bond as the first digitally native asset to be used as collateral for SNB repos. Tether's CTO Ardoino expressed satisfaction with the progress of the collaboration and encouraged other communities to learn from the "impressive, visionary administration" that is driving the "future of Lugano."
