Tag Archives: switzerland

Lightning Network in El Salvador and Lugano

Uncovering the Widespread Adoption and the Advent of the Lightning Network in El Salvador and Lugano

Acknowledging the unprecedented potential of Bitcoin’s Lightning Network, El Salvador and Lugano are two of the most significant adopters of this remarkable technological breakthrough.

El Salvador & Lugano Propel the Bitcoin Adoption

As a cornerstone moment for the Bitcoin economy, a memorandum of understanding (MOU) was signed on 28 October 2022 between the nation of El Salvador and the city of Lugano in Switzerland. Moving forward, the goal of the MOU is to increase the use of Bitcoin not only in their respective areas but also in the states and nations that are nearby.

Overall, the anticipated aims of the partnership include bolstering cooperation in education and research for both El Salvador and Lugano, assisting initiatives to promote the adoption of Bitcoin and other digital tokens in their respective regions, and encouraging the exchange of students and talent between the two countries.

Exploring the Innovation Brought by the Lightning Network

So far, the scalability of the Blockchain has been a significant barrier to the widespread acceptance of cryptocurrencies from their inception. The Lightning Network’s second layer introduces a cutting-edge solution to this matter, as it intervenes by processing transactions outside the first-layer blockchain mainnet while retaining the mainnet’s robust decentralized security model. By bypassing the official Bitcoin blockchain, the Lightning Network can grow Bitcoin transactions per second (TPS), charge reduced fees, and allow new use cases like micropayments.

In addition, the Lightning Network has the potential to bring financial inclusion and freedom to the developing nations involved, in part because it is a trusted and private network that does not require the participation of third parties or intermediaries. Moreover, it could also lessen the likelihood of governments enacting policies restricting the free flow of capital. It also helps people who do not have access to bank accounts by facilitating transactions in a manner that is almost instantaneous and free of charge, thereby making Bitcoin usable not only as a means of payment but also as a means of exchange.

How Lugano is Leading Crypto Adoption in Europe

Lugano appears to have the same goal as El Salvador: to have all local businesses routinely accept cryptocurrencies as a form of payment. However, Lugano does not appear to have the same goal as El Salvador of making Bitcoin or any other cryptocurrency legal tender. Although Lugano does not hold such a position in Switzerland, the city of 70,000 people did launch its Plan B programme approximately seven months ago to increase the use of Bitcoin.

In March of 2022, Lugano announced that it would be implementing the Plan ₿ Initiative. Additionally, the technology company Polygon joined as a critical infrastructure partner. Plan ₿ Foundation, a partnership between the City of Lugano and Tether, the technology company behind the public blockchain that supports the largest stablecoin by market capitalization (USDT), has been announced today. This partnership will allow Bitcoin, Tether, and LVGA payments to be accepted in the city of Lugano.

Tether and the city of Lugano have collaborated to create a Plan ₿ aiming to increase the use of Bitcoin and stablecoins throughout the city. This, in turn, is expected to have a beneficial effect on all aspects of inhabitants’ everyday lives. As a result, the city’s financial system will be revolutionized faster than ever, thanks to the widespread use of Bitcoin.

El Salvador – the Pioneering Nation in the Cryptocurrency

In 2021, El Salvador was the first country to acknowledge Bitcoin as a legal tender. Through this avenue, El Salvador became a pioneer in demonstrating how technologies such as Bitcoin, decentralized ledgers, and peer-to-peer networks can accelerate financial literacy and inclusion

Furthermore, Latin America appears to follow El Salvador’s lead and powering Bitcoin mining farms with natural resources (such as energy generated by geothermal activity). Countries of Costa Rica in Central America and Paraguay in South America are also heading in this direction.

Bottom Line

Since most people in Europe are not yet familiar with this idea, a closer relationship between El Salvador and a nation located in Europe could usher in uncharted territory.

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Satoshi
switzerland hero

Switzerland Bitcoin Regulation will arrive next year

Switzerland Bitcoin Regulation might arrive next year.

Recently its national railway service “have jumped on the bitcoin bandwagon”, as explained by Coindesk, so now it’s time for Switzerland to start regulating fintech and digital currency.

A few days after the Swiss railway-related announcement, as SBB decided to sell bitcoin through its network of ticket kiosks – the Federal Department of Finance (FDF) announced its plans to regulate fintech with the goal of introducing a new regulation next year.

Key elements include plans for a new kind of license geared specifically toward fintech companies and a so-called regulatory “sandbox” for experimental firms. Under the proposed regime, the Financial Market Supervisory Authority would become the primary regulator of fintech firms working in Switzerland.

In a press release, the FDF explained that it will guide more researches about bitcoin and other digital currencies and it will study the distributed ledger broader applications .

The company explained:

“The FDF should conduct additional clarifications in cooperation with the interested authorities on reducing further barriers to market entry for fintech firms, also those outside financial market law (e.g. legal treatment of virtual currencies and assets).”

During a recent speech, Ueli Maurer, Swiss Finance Minister, commented that the proposed Switzerland Bitcoin regulation would help to attract more brands – even if the nation positive attitude has already attracted the attention of several blockchain-related startups to make their home in the country.

“We assume that with the steps we have prepared and the commitment we have to the overall financial services industry we can provide a solution that puts us among the top (countries) in the world that regulate this,” he explained.

Read more here about the Switzerland involvement in the fintech sector. 

<img src="/images/SwitzerlandBitcoinRegulation.jpg" alt="Switzerland Bitcoin Regulation" height="264" width="350" />

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Amelia Tomasicchio

Switzerland to accept Bitcoin for Public Services

Zug to accept Bitcoin

Zug, city ubicated in Switzerland, announced it will accept bitcoin payments for public services.
This is a pilot project to test the efficiency of the digital currency. This test will start on July 1st and will continue for the whole year.
Zug was probably chosen because it is the Swiss financial centre that has a good reputation for its low taxes.
This project appeared on the official website of Zug. Here the initiative is described as a way to test the bitcoin use for public obligations that cost 200 francs, or almost 0.44 BTC at the moment.
An official press release of this Switzerland city comments:
“The pilot project of the city government is initially limited to 200 francs on chargeable services the residents of the city train. The end of 2016 we will conduct an analysis of lessons learned. Then…the city council will decide if bitcoins and most other digital currencies are to be accepted as payment for other urban services in the future.”

Will this idea succeed?

This idea is not so new, as several cities and states have tested this method of payment during the last years, but it didn’t succeed.
Also, it is important to remember that Switzerland has lots of startups in its country: for example Xapo, ShapeShift and Monetas are located in Zug.

The city mayor is very upbeat

The city mayor Dolfi Müller commented in a post:
“We want to express our openness to new technologies and expressed early on your own experiences. And we will invite to exchange ideas with the City Council FinTech companies in the region train. Our goal is to meet their needs for optimal development in our living and economic environment in more detail.”
 

Multicurrencies Wallet – Open yours for free

To buy and spend your digital currencies, you may need a new wallet where you can store your bitcoin, for example.
On HolyTransaction wallet you can hold several cryptocurrencies including Ethereum, Litecoin, Blackcoin, etc.

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Amelia Tomasicchio