The Swiss City of Lugano in Switzerland has made several crypocurrencies including Bitcoin and Tether legal tender in a bid to become a regional crypto hub. As it happens, the latest data shows that supplies for both Bitcoin and Tether have decreased since the start of February, suggesting accelerating capital flows in the ecosystem.
The announcement came from the city’s director Pietro Poretti in a live-stream event titled “Lugano’s Plan ₿” on March 3. He was joined by Lugano Mayor Michele Foletti and CTO of Tether Paolo Ardoino.
Lugano is a municipality in Switzerland and forms part of the Lugano District in the canton of Ticino. It has a population of around 62,000.
The initiative is backed by Tether, the company behind the world’s largest stablecoin boasting $80 billion in market cap according at the time of writing. In addition to Bitcoin and Tether (USDT), the LVGA points payment token will also be used as tender in the city.
Following in the footsteps of El Salvador, the Swiss city will integrate crypto payments and allow citizens to pay for public services, taxes or other fees in BTC. Commenting on the development, Ardonio said:
El Salvador’s GDP increased by 10% and its tourism by 30% after declaring bitcoin a legal tender. Imagine what we can do in a city at the centre of Europe.
Part of the plan involved the creation of a physical venue to serve as a hub for crypto and blockchain startups. A multi-million-dollar fund will be setup in order to finance the operation, with collaboration from local universities set to generate 500 scholarships for the immediate future.
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Bitcoin & Tether Supply on Exchanges Drops
Meanwhile, data from on-chain analytics and sentiment firm Santiment revealed that both stablecoins and bitcoin on exchanges have declined in the last 30 days. The drop in stablecoins in particular has shifted since February 10th, when stablecoins on exchanges reached over $29 billion.
📉 The respective supplies of both #Bitcoin and #Tether have fallen the past 30 days. For $BTC, this has been the norm for a while. For $USDT, though, this fall began at the start of February. It’s something to watch as a signal for a push back above $45k. https://t.co/3e0EP1hI6F pic.twitter.com/4YJrd2Mam6
— Santiment (@santimentfeed) March 4, 2022
According to the analytics firm, the drop is a signal to watch as bitcoin attempts to push back above $45,000.
The developing trend in capital flows is happening during uncertain times. The Ukraine-Russia escalation, as well as Canada’s draconian sanctions on its own citizens has sparked controversy in the financial world. Are investors deploying funds on exchanges and subsequently taking self-custody in response to troubling developments?
Bitcoin exchanges hands at $41,600, up 8% on a week-on-week basis.
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