The canton of Zug, Switzerland, colloquially known as "Crypto Valley," has taken an enormous stride toward cryptocurrency adoption by enabling tax settlement in bitcoin and ether.
Zug will accept tax payments in both cryptocurrencies as early as 2021. Following a pilot expected to take place within the next few weeks, crypto tax settlement will be available for private individuals and companies alike, up to an amount of 100,000 Swiss francs (approximately $109,670 at press time).
"We are not taking any risks with the new payment method, as we always receive the amount in Swiss francs even when paying in Bitcoin or Ether," finance director Heinz Tännler explained in a press release issued on Thursday.
The tech-centric canton will facilitate crypto tax payments thanks to a collaboration with crypto-financial service provider Bitcoin Suisse, who will convert the cryptocurrencies into Swiss francs (CHF) on behalf of the state.
"The combination of trading technology and payment transactions with cryptocurrencies enables us to offer the taxpayer a good user experience and to offer the canton of Zug a mature service," Dr. Arthur Vayloyan, CEO of Bitcoin Suisse, explained in a statement.
According to Lucas Betschart, president of the Bitcoin Association Switzerland, enabling crypto tax settlements will act as a significant boon for Zug's residents.
"This enables people and companies based in Zug living nearly completely off Bitcoin, without having to touch fiat money," Betschart told the BTC Times.
Indeed, Bitcoin is already thoroughly woven into the fabric of Zug society. In a similar collaboration with Bitcoin Suisse, circa 2016, the canton's eponymous capital started accepting the pioneering cryptocurrency for various government services, including tax settlement and passport issuance.
Bitcoin Suisse has played an instrumental role in shaping crypto adoption in both Zug and the broader Swiss landscape. As reported by the BTC Times, Swiss health insurance provider Atupri now stands as the first Swiss insurance companies to accept payment in bitcoin and ether following a partnership with the merchant processor.