Zermatt, a municipality in the southern Valais canton of Switzerland, has officially ratified a plan to allow citizens to make their tax payments in Bitcoin.
Bitcoin Suisse, a cryptocurrency financial service based out of the country, announced in a press release that it had partnered with the authorities of the municipality to provide the new tax payment gateway.
Structured Crypto Tax Payments for Zermatt Citizens
As the release explained, Zermatt authorities have started to accept Bitcoin as a tax payment means on January 28. Thanks to the integration with Bitcoin Suisse, citizens of Zermatt will be able to make tax payments directly to the Zermatt tax Office- the city’s tax authority- while the Office will be able to convert all tax Bitcoins into Swiss francs. Of course, the task for Bitcoin Suisse is to act as a payment processor, collecting Bitcoins from the Tax Office and sending the fiat equivalent to the municipality’s bank account.
Residents of the municipality can either make their tax payments via an online portal or a point-of-sale tool installed in the Zermatt town hall. However, those who choose to use the online portal will need to apply directly to the Tax Office for a crypto payment solution.
Romy Biner-Hauser, the mayor of Zermatt, explained that the aim of this innovation is to help the city meet the growing demand for Bitcoin-based tax solutions. “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,” he explained.
The news goes on to underscore the progress that Switzerland has made when it comes to cryptocurrency acceptance and integration. As things stand, Zermatt is only the second region in the country that is accepting tax payments in Bitcoin. The first to open its doors was Zug- one of the most popular cities in Switzerland.
Zug started to accept Bitcoin payments as far back as May 2016. The town, which has been dubbed by many as “Crypto Valley,” also accepts Bitcoin payments for certain city services- including but not limited to public utilities- the same year. However, tax payments have been capped at 200 francs worth of Bitcoin.
No CBDC in Sight for Now
However, while Switzerland has made significant progress in championing crypto adoption, news of a country-wide digital asset has stalled for the time being. Last month, the Federal Council approved a report outlining the potential benefits and perceived risks of launching a Central Bank digital currency (CBDC) to complement the franc.
Following a careful analysis, the Federal Council concluded that a CBDC would fall short of the expectations for effective monetary policy, payment efficiency, and helping to stabilize the financial system. The view was shared by the Swiss National Bank, which argued that although a CBDC will help improve financial inclusion and make various aspects of financial life much easier, the threats to monetary policy and financial stability outweigh those benefits. As such, the government explained that any further work into a CBDC would only be sanctioned if it is restricted to players in the financial market and inaccessible to the general public.
As the Bank explained, a “wholesale” token will help improve efficiency in financial activities such as settlement, trading, and securities management. However, opening access to the public will just bring about financial stability risks.