Swiss Government to Experiment with BitcoinPublished May 16, 2016 by Lee R
The trial basis for accepting a limited number of government payments marks the first time a government will use Bitcoin.
The Bitcoin experiment is on in Switzerland.
Ensconced in an enclave that already has acquired the nickname crypto-valley for housing over a dozen companies specializing in Bitcoin-related activities, the Swiss town of Zug will begin processing Bitcoin payments on July 1st and continue through the end of the year, at which time the city council will decide on whether to expand Bitcoin payments to more government services.
How It Will Work
The agreement to process payments of up to 200 Swiss francs ($200; £140) using the cryptocurrency is reportedly the first time a government will use the currency.
The experiment is a product of what Zug Mayor Dolfi Mueller says the city council's desire to show its "openness to new technologies" and cater to local financial technology companies.
Some officials are opposed to the implications, as far as relying on virtual currency in any way or considering expanding its use. Zug council member Gregor Bruhn warned Swiss newspaper Neue Zuercher Zeitung. "The town of Zug could undermine the status of cash with its actions."
Some liken cryptocurrency to the credit cards, where money is being exchanged in an alternate pre-agreed upon form. Others remain unclear as to what secures a cryptocurrency, or if merely a cyber account is sufficient species of value.
The benefits are also unclear, but experiments such as Zug's can shed more light on the benefits and appeal of cryptocurrencies, which are barely five years old (the first Bitcoin transaction took place in 2011).
Concerns aside, if enough people voluntarily buy in, there is no doubt that governments would be willing, as well, as long as this and other crypto-experiments can show reduced processing times, lower transaction costs, and other efficiency benefits from using the virtual currency.
Mueller Far Ahead
Unconcerned, Mayor Mueller is ready to find out. He responded to Bruhn's comment thusly: "I can imagine that in the near future it will be possible to pay your tax bill with Bitcoin."