Zermatt is the third Swiss town to allow its taxpayers to pay with Bitcoin. In reality, this will have almost no impact. But it shows a changing sentiment towards cryptocurrencies.
The Swiss town of Zermatt now allows its residents to pay their taxes with Bitcoin. After Zug and Chiasso, Zermatt is the third Swiss town to accept cryptocurrencies.
Zermatt is a Swiss ski resort that is home to about 5,400 residents. Residents will not only be able to pay their taxes but also other government services such as work permits with Bitcoin.
More of a marketing stunt than real-life Bitcoin adoption
Taxpayers can make payments via a point-of-sale tablet from Bitcoin Suisse AG installed in the town hall, or through an online payment portal. Bitcoin Suisse will then convert the coins into francs and transfer the correct amount to the municipality.
So technically, the municipality does not accept cryptocurrencies. The final payment will still be made in fiat-currency. Also, according to Mayor Romy Biner-Hauser, it is unlikely that there will be many transactions.
Thus, the whole action seems to be more of an attempt to create more crypto-awareness and is probably a marketing stunt, rather than an effort to revolutionize Zermatt’s administration. Biner-Hauser says, “Everyone is talking about cryptocurrencies and blockchain and if you don’t try it out, you don’t get smarter.”
She outlined the plans to meet demands for crypto payments, saying, “An innovative, pioneering spirit is one of the trademarks of Zermatt, which is why we are happy to support residents in providing them with the solutions they require.”
Paying your taxes in Bitcoin is like paying your taxes in gold or silver
The first municipality in Swizterland to accept crypto payments was the city of Zug, which started taking Bitcoin payments in 2016. The capital of Switzerland’s “Crypto Valley” began accepting Bitcoin payments for certain city services such as public utilities, although the payment was reportedly capped at 200 francs worth of Bitcoin.
But even in Zug, almost nobody makes use of the service. Paying your taxes and utility bills in Bitcoin is simply not practical. In fact, paying for anything in Bitcoin is not really practical. The asset is too volatile to be a feasible means of payment, and that’s unlikely to change anytime soon. Paying your taxes in Bitcoin would be the same as paying your taxes in gold or silver.
For the same reason, almost no jurisdiction anywhere in the world is accepting Bitcoin as an official means of payment. Just in January, lawmakers in the United State’s New Hampshire state legislature retracted a bill that would have enabled state agencies to accept digital assets as tax payments.
However, Zermatt’s offering shows that the sentiment towards cryptocurrencies might be changing. While Bitcoin and other cryptocurrencies have gotten a somewhat dodgy reputation after the 2018 crash, people have recently become more open to the technology. This sort of curiosity – or as Biner-Hauser says: “trying things out” – is the key driver behind innovation. So even though Zermatt’s crypto gateway won’t have much practical use, it still is a step into the digital future.