One of Switzerland’s 26 states, the Canton of Zug, made a big announcement September 3rd. Beginning in 2021, taxes in the Canton of Zug can be paid in Bitcoin or Ethereum.
The Canton of Zug, what some refer to as the “Crypto Valley,” known for its crypto-friendly attitude, has been allowing citizens to pay for government services in Bitcoin since 2016. Canton Valley is now home to several crypto funds and companies, including well known Bitcoin Suisse. If all fairs well, this can be a positive sign that crypto can mix well with government when accepted as tax.
But Is it feasible for a government to accept volatile cryptocurrency? The government’s solution was to partner with a popular local broker, Bitcoin Suisse, to ensure that they aren’t exposed to the swings of the market. With 127,000 people living in the Swiss Canton of Zug, directly managing and accepting crypto would become an impossible task. The Canton of Zug’s native crypto company, Bitcoin Suisse, formed a mutual relationship with the government, assisting them in their regulatory duties while profiting as a broker.
The Canton of Zug is one small drop in the bucket of governments exploring ways to leverage digital assets. China is exploring CBDCs, US Congressman Tom Emmer is accepting crypto donations and Iran is increasing its mining hash power. Observed as standalone events, the above examples are only mildly interesting at best. Together, these advancements signal an obvious trend. Governments are becoming more and more interested in crypto and adoption is becoming more and more inevitable.