Lugano makes Bitcoin a municipal payment rail as merchants adopt Lightning

Published: 2025-12-26 11:04:17 |

Lugano has expanded its Plan ₿ program so residents and merchants can pay and accept municipal invoices and everyday purchases using Bitcoin (on‑chain or Lightning) and USDT. Payments route over Lightning or are processed by Bitcoin Suisse and are immediately converted to Swiss francs, with an embedded ~1% FX/processing fee; the city does not hold crypto on its balance sheet. The MyLugano app offers up to 10% LVGA token cashback at participating merchants; LVGA can be spent on municipal services, creating a city‑backed circular payments loop. Over 350 merchants accept Lightning payments and the Plan ₿ Forum attracted more than 4,000 attendees in October 2025, indicating growing real‑world usage. For traders, the rollout increases localized, persistent utility demand for BTC (more hot‑wallet receipts and Lightning onboarding) while creating steady sell‑side conversion pressure as receipts are flipped to CHF. Near‑term price impact is likely limited — liquidity, ETF flows and funding rates remain dominant drivers — but the initiative strengthens structural demand and broadens use‑case narratives that can support long‑term price floors for BTC.

Neutral

The expansion of Lugano’s Plan ₿ raises BTC utility by enabling municipal and retail payments via on‑chain and Lightning, increasing hot‑wallet use and broader Lightning adoption — all positive structural drivers for demand. However, the city immediately converts received crypto to CHF, creating persistent sell‑side conversion pressure that offsets some demand. In the near term, market drivers such as liquidity, ETF inflows/outflows and derivatives funding remain the dominant forces for BTC price moves, so this development is unlikely to trigger a strong immediate rally or drop. Over the medium to long term, steady real‑world payment use cases and merchant adoption can strengthen narrative support and incremental structural demand, helping reduce downside risk and potentially support price floors. For traders: expect slightly higher on‑chain and Lightning activity and potential increased sell pressure from conversion flows; trade impact should be limited unless adoption scales much larger or other macro/ETF factors change.