Lugano deepens Tether ties as crypto push aims to revive local economy

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Lugano deepens Tether ties

Highlights

Lugano extended its partnership with Tether in March by four years, securing a SFr5 million commitment to expand its Plan B crypto initiative.
About 150 digital asset companies have launched locally due to Lugano's crypto strategy, yet most are small start-ups with limited immediate economic impact.
Despite nearly 47,000 LVGA wallet downloads, crypto payments like bitcoin or USDT have low adoption, making up just 0.02 per cent of sales in some retail shops.

Crypto strategy and Tether partnership

As reported by the Financial Times, Lugano has spent recent years building itself into a European crypto hub, with nearly 500 shops accepting bitcoin, Tether's USDT or the city's own LVGA token, while some taxes, parking fines and childcare charges can also be paid digitally.

The shift follows a contraction in Lugano's traditional private banking business after the end of Swiss bank secrecy laws in 2018. Mayor Michele Foletti says the city sees digital assets as a way to attract investment, create jobs and give younger residents more reasons to stay or return to the area.

Lugano's relationship with Tether began in 2021 after Foletti was introduced to chief executive Paolo Ardoino. The city and the stablecoin group went on to create Plan B, a non-profit venture focused on crypto payments, education and company formation in the region, alongside an annual conference that drew more than 3,500 people last month.

This March, the initiative was extended for four years with a SFr5 million commitment from Tether. Foletti says the city is moving from an old finance model toward a new one, and adds that delegations from Tokyo, other Swiss and Asian cities, and the UAE have visited to study Lugano's approach.

Even so, Tether has never established an official base in Lugano. Foletti says the company explored a Swiss legal presence in 2024 but did not proceed after Switzerland joined the OECD's minimum global tax regime, while a person familiar with the matter says Tether was dissatisfied with the treatment it received.

Plan B does maintain a building in central Lugano that houses several crypto companies linked to the stablecoin group. One of them, UBQ Services, presents itself as a technology consulting business, though two people familiar with the matter say Tether sold services through UBQ despite lacking its own Swiss legal entity; corporate filings list Tether chief operating officer Claudia Lagorio as a UBQ board member.

Economic hopes and reputational risks

Lugano's leadership argues that the crypto strategy is helping reposition the city after the weakening of its banking model, and Foletti says about 150 digital asset companies have sprung up locally, though most are still small start-ups with limited immediate economic impact. Tether's support has also helped attract related businesses, including Blockstream, which opened a lakefront office in October.

The city's crypto ties also extend internationally. In July, an honorary consulate of El Salvador was opened inside the Plan B building, reinforcing links between Lugano and a country where bitcoin is legal tender; Giacomo Zucco, a crypto entrepreneur and investor, was named honorary consul and says the role is mainly symbolic and aimed at promoting crypto use in both places.

Critics argue the partnership exposes Lugano to unnecessary reputational risk because Tether has long faced scrutiny over the assets backing its token and over allegations that its stablecoin facilitated sanctions evasion or terrorism payments, claims the company denies. Socialist councillor Raoul Ghisletta says the city is replacing one form of financial opacity with another and warns that the association is harmful for Lugano's image.

That concern is amplified by Lugano's past struggles with money-laundering scandals and by fresh criminal cases involving crypto in nearby Italy. Some local resistance is visible in the repeated vandalism of a sculpture of bitcoin creator Satoshi Nakamoto that was installed near the lakeshore.

Consumer adoption also remains limited despite official backing and promotional incentives. While nearly 47,000 residents have downloaded the LVGA wallet, the use of bitcoin or USDT in everyday purchases appears low; one cigar shop in the city centre says only 0.02 per cent of this year's sales were paid in crypto, with the owner describing the system as more marketing than mass payment use.

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