Swiss City of Zug accepts Bit…

Swiss City of Zug accepts Bitcoin payments

17/05/2016

The Swiss Municipality of Zug will accept Bitcoin as payment for municipal services. The pilot will run from July 1 till the end of the year. According to Niklas Nikolajsen, CEO and cofounder of the Bitcoin Suisse trading house, this is the first time that a government agency will accept the cryptocurrency.

The Municipality of Zug will be accepting Bitcoin payments up to a value of CHF 200 (about 180 Euro). The City Council made this decision earlier this month. It fits their ambition to become a regional hub for the Financial Technology (FinTech) sector in the country. According to the SWI news article, the self-appointed "crypto valley" of Switzerland hosts around fifteen companies specialising in the blockchain technology that underpins Bitcoin.

Cryptocurrency

Bitcoin is a digital currency based on the blockchain technology. Its wallets and transactions are protected by strong cryptography — hence the term cryptocurrency — while its distributed transaction store serves as a public ledger.

What makes this move by the Municipality of Zug special is that governments accepting currencies other than their own for taxes and fees lose the ability to impose a hidden tax on holders of the official currency by "printing" additional money.

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