In the picturesque Swiss city of Lugano, a future where Bitcoin, stablecoins, and central bank digital currencies (CBDCs) can coexist is deemed “quite possible,” according to Paolo Bortolin, Deputy Chief Financial Officer for the city of Lugano. Bortolin expresses optimism about the potential harmony among different digital currencies and assets, asserting that Bitcoin, CBDCs, and stablecoins could effectively serve distinct purposes for users.
Bortolin highlights the unique characteristics of each digital currency. Bitcoin, as a decentralized and constant presence, operates independently. In contrast, CBDCs are inherently centralized, with wholesale CBDCs facilitating transactions within the financial sector, while retail CBDCs serve as a standard digital currency for everyday payments, similar to traditional Swiss franc transactions.
While Bitcoin and CBDCs do not inherently conflict, Bortolin suggests that certain types of state-issued money could pose challenges. He points out that while wholesale CBDCs are expected to arrive swiftly, the future of retail CBDCs is less certain due to concerns such as privacy. Additionally, retail CBDCs could potentially compete with traditional banks, as users might manage all their Swiss francs through a central bank-controlled digital wallet, diminishing the necessity for traditional banking services.
Bortolin also discusses the potential competition among stablecoins issued by private entities, speculating that one stablecoin might emerge as the leader in each currency, akin to Tether’s current dominance in the United States dollar.
The Swiss city has actively engaged with the digital currency landscape, advancing its wholesale CBDC project, Helvetia III. While not actively participating in the project, Lugano is in discussions to explore this approach in the coming months. Bortolin emphasizes that if the Swiss National Bank issues a CBDC, Lugano would certainly embrace its usage.
Lugano’s commitment to embracing diverse digital currencies is evident from its Plan B initiative launched in collaboration with Tether. The city has expanded its scope of supported crypto payments, allowing residents to pay taxes and other community fees with Bitcoin, USDT, and the local stablecoin LVGA. Since the initiative’s launch, Lugano has gained 400 merchants accepting BTC and USDT, with a user base of 14,000.
