El Salvador and the Swiss city of Lugano recently signed a Memorandum of Understanding on Economic Cooperation, centred on the acceptance of bitcoin and other cryptocurrencies, according to Milena Mayorga, El Salvador's ambassador to the United States. The Lugano city in Switzerland signed the cooperation pact with El Salvador during the city's Plan B event powered by stablecoin issuer Tether on October 28 2022. The agreement aimed at spreading Bitcoin adoption globally.
Milena Mayorga is excited about the opportunities now open to the Central American nation now that a Bitcoin office has been opened in Lugano. Switzerland's interest in the agreement was sparked by El Salvador's acquisition of Bitcoin as a legal tender, allowing pro-crypto countries to establish a physical government presence to «foster cooperation with educational and research institutions» and the appointment of an Honorary Consul to promote awareness of Bitcoin throughout Europe.
During the announcement on Friday, Mayorga said that «my fellow Salvadorans and I are very delighted by the promise of Bitcoin, and I look ahead to seeing how this action will help improve access to economic security and economic freedom for all.» According to Joaquin Alexander, El Salvador's ambassador to the United Nations in Geneva, «the use of Bitcoin and blockchain technology produces new opportunities for extension and investment that benefit our communities; it's a new alternative financial and exchange tool that fosters trade and the provision of services in a globalised world.»
In September 2021, El Salvador became the first country to establish Bitcoin as a legal tender. Businesses in the country are required by law to accept crypto assets as payments if they have the technical ability to do so. The President of El Salvador, Nayib Bukele, remains supportive of using Bitcoin despite the coins' massive price retracement. The president has invested millions of dollars in Bitcoin during the bear market, leading to Bitcoin aficionados attending conferences and promoting the currency's adoption in the country. In March 2022, Lugano took similar measures of making the asset a «de facto» legal tender, together with the United States Department of the Treasury (USDT) and LVGA stablecoins. This meant that local businesses and institutions can now use Bitcoin for tax payments, parking fines, public services, and school tuition. LVGA stablecoins are the official local payment token of the City of Lugano, which are managed within a digital wallet inside the MyLugano App and are powered by blockchain technology. Coins purchased inside the app or earned when shopping locally at affiliated shops can only be spent within the MyLugano circuit.
During the Bitcoin embassy Plan B event in Lugano, Mayorga was joined by Indira Kempis, Mexican politician Fillip Karaorevi, Prince of Serbia, and Director of Economic Promotion in Lugano Pietro Poretti. In contrast, former congressperson and probable presidential contender Zury Rios from Guatemala joined through a video link. Rios expressed her support for the idea that her country would embrace Bitcoin but made no policy promises in the process.
Tether applauded the partnership between El Salvador and Lugano. In a statement released, Tether's Chief Technology Officer (CTO) Paolo Ardoino said, «We support the pioneers leading Lugano and El Salvador for launching this initiative, which guarantees to raise the exchange of best systems and ideas regarding the power of cryptocurrencies.» According to an expert at Bitcode Method, earlier this year the stablecoin issuer announced that it would design a capital of up to 100 million Swiss francs to assist finance blockchain start-ups in Lugano. Tether has supported El Salvador with numerous Bitcoin adoption initiatives and is now sponsoring its upcoming «Adopting Bitcoin» conference. In a recent blog post, Tether endorsed the agreement, and Ardoino noted that «Tether would stand ready to assist however we can.»
During the Plan B event, Samson Mow, former Blockstream chief strategy officer, said the arrangement was the next step in nation-states and cities adopting Bitcoin. Mow continued by saying that «El Salvador and Lugano are going to start functioning together and cooperating on joint initiatives. I think that's how we push each other forward — basically creating alliances between places that have adopted Bitcoin.» Former television presenter and producer of Keiser Report, the first international television news program to cover bitcoin. Bitcoin advocate Stacy Herbert posted a tweet that said, «The world's first Bitcoin diplomat constitutes as the world's first Bitcoin state in the first ever Bitcoin Embassy of El Salvador in Lugano.» The El Salvador ambassador in Geneva added that «with this consensus, El Salvador is now much closer to Europe.»
While Lugano and El Salvador join hands to establish the Bitcoin embassy, many people are rooting for its success and commend its initiative. We will keep our ears on the ground for any update on this matter and make sure that we bring you the latest news on how it is going with the new launch of the Bitcoin embassy in Switzerland. Please note that this article is for informative objectives only and does not in any way serve as a piece of legal advice.
