Pro-crypto city of Lugano and El Salvador sign economic agreement based on adoption

by · October 28, 2022

Switzerland’s southern city of Lugano and El Salvador have signed an economic cooperation agreement based on crypto and blockchain.

According to an announcement from Lugano on October 28, the two pro-crypto jurisdictions signed a memorandum of understanding on economic cooperation at the city’s Plan B event. Lugano Mayor Michele Foletti cited El Salvador’s adoption of Bitcoin (BTC) as legal tender as part of the city’s interest in the deal, which will allow the pro-crypto country to establish a physical government presence in an effort to “promote cooperation with education and research institutions.”

“The use of Bitcoin and Blockchain technology creates new opportunities for growth and investment that benefit our communities; it is a new alternative financial and exchange tool that promotes trade and the delivery of services in a globalized world,” said Joaquín Alexander Maza Martelli, El Salvador’s ambassador to the United Nations Office in Geneva. “With this agreement, El Salvador is now much closer to Europe.”

Speaking to Cointelegraph at the Plan B event, former Blockstream Chief Strategy Officer Samson Mow said the deal was the “next step” in nation states and cities adopting BTC:

“[El Salvador and Lugano are] shall begin to work together and cooperate on joint initiatives. I think that’s the way we push each other forward – basically creating alliances between places that have adopted Bitcoin.

Stablecoin issuer Tether, which announced in March that it would create a fund of up to 100 million Swiss francs to help finance blockchain-based startups in Lugano, backed the deal in an Oct. 28 blog post. Chief Technology Officer Paolo Ardoino said Tether would “stand ready to help as best we can.”

Related: McDonald’s begins accepting Bitcoin and Tether in the Swiss city

As part of the Plan B initiative, Lugano plans to allow residents to use BTC, Tether (USDT) and LVGA tokens as “de facto” legal tender in many shops and businesses in the area, as well as to pay taxes, parking tickets, public services and school fees. In El Salvador, BTC has been accepted as legal tender since the adoption of the country’s Bitcoin Law in September 2021.