In everyday life, Zug's Crypto Valley feels like a ghost town

Whether in a restaurant, car dealership, government office or supermarket –you don't need cash or a card to survive in Zug.
 

When a certain Satoshi Nakamoto published the famous Bitcoin white paper in October 2008, he was not outlining a new asset class, but an electronic payment system – as an alternative to (digital) cash. More than fifteen years later, the reality is different. Today, Bitcoin is primarily considered to be an investment that is subject to strong fluctuations. This makes what has happened in the canton of Zug all the more remarkable. For several years now, government taxes, croissants, cars and restaurant visits can be paid for in cryptocurrencies here. The only question is: how often are these offers used? The Zuger Zeitung newspaper investigated.

It all started with the Zug City administration, which, in 2016, was the first public authority in Switzerland to accept fee payments in Bitcoin. Even today, bills of up to CHF 200 can be paid in Bitcoin, and now also in Ethereum, at the Residents' Registration Office (Einwohnerkontrolle). According to the city of Zug, however, this option is hardly ever used. Only two people made crypto payments last year, and none have been made so far this year.

There is a QR code for paying with common cryptocurrencies at the Spar supermarket in Zug          Photo: Felix Ertle
 

Crypto drops on hot tax stones
Nevertheless, the canton followed suit in 2021. Since then, taxpayers in the canton of Zug have also been able to settle their tax debts using Blockchain Technology. According to the cantonal council and finance director Heinz Tännler, the canton wants to use this service to consolidate its reputation as a crypto pioneer, while also meeting the needs of the population and companies. Around 120 crypto payments were actually received last year, totalling CHF 3.3 million. Compared to the canton's total tax revenue, however – which is more than CHF 4,000 million– that’s a drop in the ocean.

Is there more demand for this service in the private sector? Guests have been able to pay with Bitcoin at the Meating restaurant on the Grafenaustrasse for around three years. The headquarters of Bitcoin Suisse are located right next door, and this proximity is no coincidence, says a service employee. There was initially a noticeable rush when they started accepting Bitcoin and Ethereum, mainly from the employees and partner companies of the crypto company. But they only register one or two crypto payments per month now. Nevertheless, they want to keep the offer. ‘It fits the image of the canton,’ says the employee. ‘And if Crypto is going to establish itself anywhere as a means of payment, it will be in Zug.’

Crypto payments have also been possible at MB Auto Centre Zug since 2021, although the offer is rarely used. According to CFO Thomas Estermann, ten customers paid with Bitcoin or Ethereum in 2024, and only five so far this year. The purchases are mostly for more expensive vehicles, and occasionally for tyres or spare parts, he adds.

Could the breakthrough perhaps lie in retail? From April of this year, the Spar supermarket in Zug has been accepting crypto payments, even for small amounts such as croissants or ready-made salads. According to the media office's written response to our enquiry, there is a spirit of optimism at Spar in this regard, and they are convinced that this payment method will shape the future. According to the media office, the branch records between thirty and fifty transactions per day, and there are plans to equip all Spar branches with this new technology. The trend is rising, although the media office did not provide specific figures.

The world's most expensive pizza
In the meantime, a survey conducted by the Zuger Zeitung newspaper on site completes the picture. The result: of the 43 customers surveyed, none had paid with crypto. Most were unaware of the payment option, and viewed Bitcoin and other cryptocurrencies as purely speculative investments.

Why? Perhaps, like many crypto enthusiasts, those surveyed still find the story of the world's most expensive pizza hard to stomach. In May 2010, a US programmer paid 10,000 Bitcoin for two pizzas, worth around 40 dollars at the time. On 10^th July this year, they would have been worth around CHF 700 million.

Satoshi Nakamoto's original goal of successfully establishing Bitcoin as a means of payment has thereby hardly been achieved to date. And despite more than 700 Blockchain companies in the canton of Zug, Bitcoin remains more of an image-building exercise than a practical reality in everyday life.