The town of Zug, Switzerland will accept bitcoin as payment for municipal services as part of a pilot program running from July 1st through the end of 2016. According to the mayor, their goals are to show openness to new ideas and to attract fintech companies to the already thriving economy.
Zug has unusually low taxes and is already known as "Crypto Valley" by some entrepreneurs because of the prevalence of blockchain-related companies there. These articles point out that with a population of less than 30,000, a government that is economically laissez-faire, and "more financial clout than you'd expect," this is actually an interesting testing field for bitcoin.
https://www.cryptocoinsnews.com/swiss-town-accepts-bitcoin-payment-municipal-services/
http://www.engadget.com/2016/05/08/swiss-town-accepts-bitcoin/
This article in Fortune appeared shortly after the crypto news stories. There's a link at the bottom to a letter from the conservative nationalist party to the council of Zug. Basically, they're concerned about legal precedent and the speculative nature of the 'so-genannte "Bitcoins"' (so-called Bitcoins). I'm working on translating it to practice my German.
http://fortune.com/2016/05/09/zug-bitcoin-services/
Bitcoin transactions will be limited to 200 Francs during the pilot. Depending on the results of an end-of-year analysis, this limit could then be dropped, and different digital currencies could be allowed for municipal transactions.
Comments: I know this isn't the first city or town to have done something like this (see Madeira Beach, 2014), but I still think it's an interesting case and like to see more bitcoin adoption. Additional case studies and perspectives on adoption by municipalities are totally welcome.