El Salvador and Lugano strike an economic deal, in order to “foster cooperation with educational and research institutions.”
El Salvador will create a physical government presence as part of the agreement. El Salvador and the southern Swiss city of Lugano have agreed to cooperate economically using blockchain technology and cryptocurrencies.
The two pro-crypto jurisdictions signed a memorandum of understanding on economic cooperation at the city’s Plan B event, according to a Lugano release from October 28. El Salvador’s adoption of Bitcoin (BTC $20,681) as legal tender, which will enable the pro-crypto nation to set up a physical government presence in an effort to “foster cooperation with educational and research institutions” was mentioned by Lugano Mayor Michele Foletti as a factor in the city’s interest in the agreement.
“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 fosters trade and the provision 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 at the Plan B event, former Blockstream chief strategy officer Samson Mow said the agreement was the “next step” in nation-states and cities adopting BTC:
“[El Salvador and Lugano are] going to start working together and collaborating on joint initiatives. I think that’s the way we push each other forward — basically create alliances between places that have adopted Bitcoin.”
The arrangement was endorsed by stablecoin issuer Tether, which had previously declared in March that it would establish a fund of up to 100 million Swiss francs to aid in financing blockchain-based enterprises in Lugano. Paolo Ardoino, Tether’s chief technical officer, stated that the company “stands ready to help however we can.”
As part of the Plan B project, Lugano intends to permit locals to utilize BTC, Tether (USDT $1.00) and LVGA tokens as “de facto” legal tender at a number of the city’s stores and establishments as well as to pay for taxes, parking fines, public services, and tuition costs. Since the country’s Bitcoin Law was adopted in September 2021, BTC has been recognized as a form of payment in El Salvador.
