Lugano, in the Swiss canton of Ticino, has taken a significant step in establishing itself as a major European blockchain hub.
In early March, the government of Lugano announced a partnership with Hong-Kong based fintech Tether, the stablecoin token trading under the ticker USDT, as finews.com reported.
Lugano Plan B
Lugano’s so-called Plan B aims to enable the city’s entire infrastructure to be blockchain-enabled, allowing for services to be paid for in Bitcoin, Tether and the city’s own stablecoin, Luga.
To make this possible, stablecoins strive to trade as close to a 1:1 underlying currency value, keeping price fluctuations within narrow limits.
Like the substantial energy required to run blockchain, substantial funding is also required for Lugano’s crypto vision. To accomplish this, Tether seeks to establish an investment fund of at least 100 million Swiss francs ($1o7 million). On top of that there will be a local investment vehicle of another 3 million francs.
The funds will support local fintechs and startups working on, and further developing, bitcoin and blockchain technology. Some funds will also go to local businesses to ease the introduction of related tools into everyday life and transactions.
Additional funding will go to a hub where some 300 startups are to set up shop, and will be the heart of Lugano’s crypto ambitions.
The funding doesn’t end at helping companies. Over 500 students from three local universities will benefit from scholarships in the field of these new technologies.
Some of this research will likely go to crytpocurrency mining, currently a massive consumer of energy, to produce «green energy.»
In tethering itself to Tether, Lugano is taking a risk, given some previous controversy surrounding the Hong-Kong company. In 2019, Tether faced accusations of concealing a loss of $850 million on its system.
Tether also had to admit that the underlying currency does not consist entirely of dollars, but other assets as well, including other cryptocurrencies and third-party loans.