A customer orders coffee at a McDonald’s next to a lake surrounded by mountains in the center of the Swiss city of Lugano. “Can I pay with Bitcoin?” he asks and the person behind the counter shows him what looks like a credit card payment terminal.
Actually, It is an ATM for paying with cryptocurrencies. The city council distributed the equipment free of charge to local businesses. The buyer pays contactlessly using his mobile Bitcoin wallet. The invoice amount is 0.00008629 which is approximately £6.60.
Few people who have purchased Bitcoin would likely consider using it to purchase products in stores. Generally it is considered an investment, a bet that its value will increase. But In Lugano, in the Italian-speaking part of Switzerland, the story is different.
Although you can of course still pay for everything in Swiss francs, around 350 shops and restaurants already accept Bitcoin. The city council has even started accepting cryptocurrency payments for municipal services. For example, you can use Bitcoin to pay for child care.
I start talking to McDonald’s customer Nicolás, who is from France. He could be described as a loyal supporter of Bitcoin. “The good thing about paying with Bitcoin is the feeling of freedom it gives you,” he says. “You are no longer dependent on a financial system with its intermediaries and its costs.”
Nicolás says he discovered Bitcoin cards in Switzerland. These are prepaid gift cards. You buy a set amount in Swiss francs but download it in Bitcoins to a digital wallet on your phone.
I walk through the center of Lugano, along a main street where almost all the shops sell luxury goods. Mainly jewelry and expensive clothing. At a shop called Vintage Nassa, which sells new and used bags and watches, Owner Cherubino Fry tells me he accepts Bitcoin because the processing fee he has to pay per transaction is lower than those charged by credit card companies..
In the case of Bitcoin is typically less than 1%, while it can reach 1.7% for debit cards and up to 3.4% for credit cards. However, for the last two, the percentage may vary depending on the country.
I ask Mr. Fry if he does a lot of business in Bitcoin. “Not much actually. Sporadic at the moment, just a few customers,” he says, adding: “But the use of Bitcoin will be like a tree that grows, and that tree will grow a lot in five or 10 years.”
Two steps from Mr. Fry’s shop, I visit the headquarters of Plan B, an initiative launched in 2022 by the Lugano City Council in collaboration with the cryptocurrency platform Tether. The B stands for Bitcoin and Their stated goal is to educate people about cryptocurrencies and “make Lugano the European Bitcoin hub.”
“I want to talk about an experiment I conducted in July,” says Mir Liponi, director of the Plan B Center. She explains that she had a problem with her bank that prevented her from accessing her money. For eleven days he had no other option to pay than with Bitcoin, but he says that the experiment went well and that in Lugano you can practically only survive with Bitcoin.
“At the moment there is a lack of public transport… and another important problem is fuel. The food is fine. They even bring it to my house. There are many medical centers but no dentist. And another important problem is the energy bills. They still cannot be paid with Bitcoin,” he elaborates. Ms. Liponi adds that in the future she would like to see “circular economies where people earn bitcoins, hold bitcoins, spend bitcoins and pay for services in bitcoins.”
However, Elsewhere, Bitcoin projects similar to those in Lugano have failed. In 2021, El Salvador declared Bitcoin legal tender alongside the US dollar. To encourage usage, the government offered citizens the Bitcoin equivalent of $30, which they downloaded through an app.
“So people downloaded the app, exchanged the bitcoins for dollars and never used them again,” says Vincent Charles, director of cryptocurrency company Unchain Data.
went to El Salvador Earlier this year to see how Bitcoin adoption went and concluded that people don’t really use it and retailers and service providers rarely accept it.
However, There are other successful examples of Bitcoin adoption around the world. Slovenia’s capital Ljubljana has been declared the most crypto-friendly city in an April report, followed by Hong Kong and Zurich.
Not everyone in Lugano seems to be impressed by Bitcoin. In a lakeside park stood a statue depicting Satoshi Nakamoto, the pseudonym of the unknown person or people who claim to have invented cryptocurrency in 2008. In August, vandals broke the sculpture into pieces and threw it into Lake Lugano. “It’s interesting because not much is destroyed here,” says Lucía, a passerby who lives in the city. “People tend to be pretty well-behaved. And it’s also not common to meet people with very strong political opinions,” she adds, although she adds that she herself is skeptical about cryptocurrencies in general.
At the University of Lugano, where he studied, there is a club that promotes Bitcoin and everything else. “I’m surprised that institutions like my university are promoting cryptocurrencies so much. I think they are associated with crime, the dark web and speculation. Many people lose their money because they invest in a cryptocurrency and then it collapses,” he explains.
Sergio Rossi, professor of economics at the University of Fribourg, Switzerland, says Bitcoin poses a risk to traders in Lugano and elsewhere due to its volatility.: Its value can fluctuate greatly.
It is therefore important that you immediately exchange the Bitcoins you receive into Swiss francs, euros or another currency issued by a government or central bank. These are also known as fiat currencies. He adds: “There is also a reputational risk associated with cryptocurrencies used in illegal transactions, which could impact the city of Lugano and its financial institutions.”
Professor Rossi also warns that people’s Bitcoins are in the hands of a digital third party, which makes them risky: “If the platform on which my digital wallet is registered fails or goes bankrupt, my cryptocurrencies will disappear immediately. And I will lose the corresponding amount forever. In Switzerland, in contrast, all bank deposits are guaranteed up to 100,000 Swiss francs ($125,000; £94,000). That means if the bank, at “The person who registered my savings goes bankrupt, I can get them back up to this amount.”
At Lugano City Hall, I ask Mayor Michele Foletti whether he fears that Lugano could be a magnet for mafia money. “No. You can do something good or bad with fiat money,” he says, adding: “The same goes for Bitcoin.”
“And the mafia is more interested in using fiat money to launder money. If they sell drugs or something like that, they get fiat money (physically), not bitcoins, because.” Cash is the most anonymous way“, he states. He adds that Bitcoin remains positive for Lugano and 110 companies in the cryptocurrency sector have already moved or started operations in the city.
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