Zermatt is the latest Swiss town to accept bitcoin for tax payments

Zermatt, a ski resort town in southern Switzerland, announced last week that it will become the third Swiss municipality to let residents pay taxes in bitcoin.

Locals can use Bitcoin Suisse’s point-of-sale solution to pay using a tablet installed in the town hall, or request to pay online with a specialised payment portal.

But the Swiss authorities won’t be holding bitcoin just yet. Taxes will be converted into Swiss francs by Bitcoin Suisse, and then transferred to the municipality’s bank account.

"An innovative, pioneering spirit"

The Swiss canton of Zug, dubbed “crypto valley,” for it’s progressive stance on financial technology, was the first to pilot a bitcoin tax scheme in 2016, accepting payments to the municipality up to the value to 200 francs ($206) in the cryptocurrency.

Mayor Dolfi Muller admitted the move was a publicity stunt designed to promote Zug as a forerunner in future technologies, and the mayor of Zermatt, Romy Biner-Hauser, says his town shares this motivation: “An innovative, pioneering spirit is one of the trademarks of Zermatt," said Biner-Hauser, "which is why we are happy to support residents in providing them with the solutions they require."

The Swiss municipality of Chiasso on Switzerland’s southern border with Italy also introduced its own technology to let residents pay their taxes in bitcoin in 2018.

All of the schemes rely on infrastructure from Bitcoin Suisse— a payment processor that offers a range of crypto-related financial services, including buying, selling, custody, lending, and tokenization.

But while bitcoin is slowly being legitimised by tax authorities in Switzerland, similar schemes in the United States haven’t fared so well.

Ohio became the first U.S. state to accept Bitcoin for taxes in 2018, but then suspended the payment system in 2019 over legal concerns. Internet retailer Overstock was one of several businesses taking advantage of the scheme.

Similar events transpired in other U.S. states, including Georgia, Arizona, and New Hampshire where lawmakers flirted with a bill that would have allowed state agencies to accept crypto as payment for taxes, before dismissing it as “inexpedient to legislate.”