A town in Switzerland has begun to accept Bitcoin payments for certain city services. The northern town of Zug decided to allow Bitcoin payments earlier this month for public services as a part of a trial run.

The municipality services will be capped at 200 francs worth of Bitcoin, and include services like public utilities.

The trial run will extend through the end of 2016, and is intended to assess the long-term economic viability of accepting cryptocurrency for public services.

Zug part of “crypto valley”

The canton of Zug, where the town of Zug is located, is home to what is known as “crypto valley,” a geographical area home to many Bitcoin and blockchain-based startups.

The area profits from a favorable business climate and includes companies prominent in the cryptocurrency world such as Xapo and ShapeShift.

Mayor Dolfi Müller says:

“We want to express our openness to new technologies…Our goal is to meet their [fintech entrepreneurs] needs for optimal development in our thriving environment.”

Previous attempts at using Bitcoin for public services have failed

Legislative measures have been attempted before to allow government to accept payments in Bitcoin, notably in New Hampshire with HB552.

The bill failed to pass, and the 264-74 vote indicates that a similar measure is unlikely to pass in the near future.

However, with a high number of politicians accepting Bitcoin for electoral campaigns, that could change.

Jon Fingas of Engadget concludes:

“Zug would have to show that there are clear advantages (or at least, few drawbacks) to taking Bitcoin at municipal offices. The technology is secure and can lower transaction costs, but that has yet to be proven on this kind of government scale.”