Swiss City of Lugano Ushers Multiple Digital Currencies

Swiss City of Lugano Ushers Multiple Digital Currencies

The city’s finance executive believes that Bitcoins, stablecoins, and central bank digital currencies can coexist in Lugano since they can serve various purposes for users.

A local official is confident about the possibility of a future that involves the coexistence of stablecoins, Bitcoin, and central bank digital currencies (CBDCs) in the Swiss city of Lugano. Paolo Bortolin, Lugano’s deputy chief financial officer (CFO), is confident about a future that involves various digital currencies and assets being used concurrently.

Stablecoins and Bitcoin Harbor Potential to Bolster Decentralized Finance Usage

According to the official, the concurrence is because CBDC, Bitcoin, and stablecoins could effectively serve various purposes for users. In an interview with a digital media resource, he said that Bitcoin is a persistent presence and runs autonomously in a wholly decentralized way.

On the other hand, central bank digital currencies are centralized by name and definition. Wholesale CBDCs are utilized in the financial industry for transactions among institutions. On the other hand, retail CBDCs are considered the standard digital currency for peer-to-peer (P2P) transactions or daily payments, analogous to those made using the conventional Swiss franc.

Privacy Concerns Emerge in CBDC Initiatives

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Despite central bank digital currencies and Bitcoin lacking a direct conflict, some state-provided money might clash. Bortolin referred to retail CBDC-linked issues such as privacy to say that despite the expectation that wholesale CBDCs will arrive quickly, the outlook of retail CBDCs is not so certain.

The official also claimed that retail central bank digital currencies rival traditional banks. He said that if people can use a digital wallet under the bank’s management to manage their Swiss francs and a central bank digital currency to manage decentralized finance investments, traditional banks’ importance might be reduced.

Bortolin said that stablecoins like Tether might also be a critical element of the digital financial system, at least before the vast assumption of retail central bank digital currencies. He said that the privately-issued stablecoins could compete for control.

 Bortolin believes that one will potentially emerge as the leader in every currency, similar to how Tether presently holds the position for the US dollar.

Switzerland Advances in the CBDC Project

According to Bortolin, Switzerland has progressed with Helvetia III, its wholesale central bank digital currency project. He said that despite not being active in the new project, talks are ongoing to continue this strategy in the coming months. So far, only two bonds have been provided under this system.

Bortolin added that if the Swiss National Bank issues a central bank digital currency, they will utilize it. 

Switzerland is optimistic about CBDC’s potential at a time when the digitized currency is attracting a mixed-bag debate in the US. Former President Donald Trump vowed to halt CBDC attempts, alleging a threat to the US dollar. 

In December last year, Lugano expanded the scope of supported crypto payments and embraced USDT and Bitcoin as payment for community fees and taxes. Besides, it accepts payments in LVGA, a local blockchain-founded stablecoin mainly made for payments within this city.

Lugano unveiled the Plan B initiative in partnership with Tether. Since then, it has accumulated 400 Bitcoins and USDT-welcoming traders. It has also amassed14,000 users. 

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