According to a local financial official, that Bitcoin, stablecoins, and central bank digital currencies (CBDC) could coexist in the Swiss city of Lugano.
Lugano’s deputy chief financial officer (CFO), Paolo Bortolin, is optimistic regarding a future in which various digital currencies and assets may be utilized in tandem. According to the official, Bitcoin, CBDCs, and stablecoins may serve distinct consumer functions.
“Bitcoin, by its very nature, functions autonomously and completely decentralized,” Bortolin explained in a Cointelegraph interview.
On the contrary, CBDCs operate entirely distinctly, as their name and definition imply that they are centralized. Wholesale CBDCs are predominantly employed in the financial sector to facilitate transactions between institutions.
Conversely, retail CBDCs are widely recognized as the standard digital currency for routine payments and peer-to-peer transactions, akin to the conventional Swiss franc.
Although there is no direct conflict between CBDCs and Bitcoin, certain forms of state-issued currency may conflict.
“Although the arrival of wholesale CBDCs is expected to occur promptly, the future of retail CBDCs is less certain,” Bortolin said, referring to privacy concerns associated with retail CBDCs. Furthermore, the official asserts that retail CBDCs present a competitive threat to conventional institutions. His statement read:
“If individuals can manage all their Swiss francs through a digital wallet controlled by the central bank and may manage decentralized finance investments easily via a CBDC, the necessity for traditional banks might diminish.”
Stablecoins such as Tether, according to Bortolin, are also likely to play a significant role in the digital financial ecosystem, at least until the widespread adoption of retail CBDCs.
Bortolin stated, “These privately issued stablecoins could vie for dominance, with one potentially emerging as the leader in each currency, similar to how Tether currently holds the position for the USD.”
Bortolin stated that the Helvetia III wholesale CBDC initiative in Switzerland has progressed. “Although we have yet to actively engage in this novel endeavor actively—having issued a mere two bonds thus far under this framework—deliberations are currently taking place to advance with this strategy in the coming months,” Bortolin further stated.
“If the Swiss National Bank issues a CBDC, we will certainly use it, that is normal.”
Lugano expanded the range of accepted cryptocurrency payments in December 2023, adding Bitcoin and USDT as acceptable means of remitting community fees and taxes. Lugano also recognizes LVGA, a blockchain-based stablecoin constructed specifically for transactions within the city, in addition to BTC and USDT.
Following the debut of its Plan B initiative in partnership with Tether, Lugano has amassed 14,000 users and 400 merchants that accept BTC and USDT.
