Key takeaways
Adoption is voluntary. Merchants participate because Bitcoin Lightning fees are typically under 1%, compared with the roughly 3% average charged by credit card networks.
Residents can pay municipal bills, including taxes, parking fines and tuition, in BTC or USDT using standard QR-code invoices.
The city balances the ecosystem by using BTC for payments, USDT for stability and LVGA as a local loyalty token.
The city does not hold volatile crypto assets. Payments are converted instantly into Swiss francs (CHF) through Bitcoin Suisse, limiting the city’s exposure to crypto price volatility.
The cobblestone streets of Lugano, Switzerland are better known for their Mediterranean-style piazzas and high-end boutiques than for radical economic shifts. But look closer at storefronts along Via Nassa, and the familiar “Visa” and “Mastercard” stickers have a new neighbor: a bright yellow “Plan ₿” decal.
In this lakeside enclave, Bitcoin is no longer just a digital asset tucked away in a cold wallet. It is a functional currency used to buy everything from a morning espresso to a Big Mac and even to settle municipal tax bills.
The vision behind a decentralized Plan ₿
Launched in 2022 as a partnership between the City of Lugano and Tether, Plan ₿ was not designed as a marketing stunt. It was conceived as a structural overhaul of the city’s financial rails.
While countries such as El Salvador have pursued top-down Bitcoin mandates, Lugano’s approach is quintessentially Swiss: voluntary, highly organized and focused on reducing merchant friction.
The ecosystem rests on three pillars: Bitcoin (BTC) for sovereign value, Tether’s USDt (USDT) for price stability in larger commerce and the LVGA token, a local stablecoin that powers a city-wide loyalty program.
The merchant experience and organic growth
For local shopkeepers, the transition to crypto is driven less by ideology and more by the bottom line. Traditional credit card processors in Switzerland can charge merchants upward of 3% per transaction. By contrast, Bitcoin payments made via the Lightning Network, a layer-2 protocol that enables instant, low-fee transactions, often cost less than 1%.
One local shop owner describes the shift as an organic process. It’s “like a tree growing,” he told the BBC. “This tree will grow very big in five, 10 years.” While crypto payments currently account for only a small share of his daily sales, the infrastructure is already in place, waiting for the “mass” in mass adoption.
To bridge the gap, the city distributed free smart POS terminals, provided by GoCrypto, to more than 350 merchants. These devices handle the technical heavy lifting. The merchant enters the price in Swiss francs (CHF), the customer scans a QR code, and the merchant can choose to receive the settlement instantly in CHF to avoid volatility or retain the crypto.
The circular economy
Lugano’s operational backbone is the MyLugano app. This is where the “how-to” of daily life in the city becomes tangible.
When users pay with crypto at participating local shops, they receive up to 10% cashback in LVGA tokens.
These tokens are not just digital points. They are pegged to the Swiss franc and accepted for city services, public parking and even childcare fees.
This creates a self-sustaining loop. A tourist might pay for a luxury watch in USDT, earn LVGA cashback and then use that “digital change” to pay for a boat ride across Lake Lugano. By keeping value within these digital rails, the city reduces reliance on certain traditional banking fee structures, keeping more transaction value within the local ecosystem.
Governance on the blockchain through taxes and fines
Perhaps the most radical “how-to” in Lugano is how residents interact with the state. Lugano is one of the few places in the world where all municipal invoices, from property taxes to parking tickets, can be paid using Bitcoin or Tether.
The process is remarkably mundane, which is exactly the point. An invoice arrives with a standard Swiss QR code. The resident scans it with a wallet, confirms the exchange rate, which is locked in for a short window to prevent slippage, and the debt is settled. The city’s administration describes this as a “complete automation” of financial flows, reducing the administrative burden on the local treasury.
Institutional infrastructure and the 2025 milestone
The momentum behind Plan ₿ reached a new peak in October 2025 during the fourth annual Plan ₿ Forum. The event drew a record 4,000 participants from 64 countries, representing a 140% increase in attendance since the project’s inception. This growth is not merely about tourism; it reflects a deepening level of institutional interest.
In 2025, Lugano further consolidated its position by issuing its fifth digital bond on SDX, the SIX Digital Exchange, demonstrating that blockchain infrastructure extends beyond retail payments to sophisticated municipal debt markets.
The city has also become a magnet for brain gain, attracting more than 110 crypto-related startups that have relocated to the region, drawn by the regulatory clarity provided under Switzerland’s FINMA framework.
The skeptical manager’s perspective on risk
However, any professional analysis must account for friction. Not everyone in Lugano is a believer. Local critics, including university students and some academics, remain wary. The primary concern is not the technology itself, but custodial risk.
In Switzerland, traditional bank deposits are protected by state-backed guarantees. Crypto assets held in digital wallets, however, do not benefit from the same protections. “If the platform where my digital wallet is recorded fails or goes bankrupt, my cryptocurrencies disappear,” warns Sergio Rossi, an economics professor at the University of Fribourg.
Finally, while the technical infrastructure may be fully in place, “psychological adoption” remains a generational challenge. Many residents still view Bitcoin primarily as an investment rather than as a medium of exchange.
Blueprint for the future
Lugano’s experiment suggests that large-scale Bitcoin integration may depend less on ideology and more on practical user interfaces. By focusing on three specific workflows, the city has created a repeatable model for municipalities worldwide:
Provide free hardware to merchants to remove the “entry fee” for adoption
Ensure the currency can be used for routine obligations such as taxes, not just discretionary purchases like luxury goods
Use a local loyalty token to keep value circulating within the city.
As the world watches central bank digital currencies (CBDCs) with a mix of curiosity and concern, Lugano offers a contrasting model: a city experimenting with private, decentralized and stable digital assets, positioned as an alternative to state-issued digital currencies.