Vancouver Officials Move to End Bitcoin Reserve Plan After Legal Review

Highlights:

• City staff says Bitcoin cannot be included in municipal reserves under current Vancouver law.
• Legal review and provincial rules warn that public funds face a high risk with cryptocurrencies.
• Vancouver’s mayor previously supported the Bitcoin plan, but staff recommends closing the proposal now.

Vancouver city staff have advised the municipal council to end its Bitcoin (BTC) reserve plan. They concluded that local law does not allow the city to treat Bitcoin as a legal investment, according to a motion update report released Monday. This decision marks a major shift in one of Canada’s most high-profile attempts to bring digital assets into city finances. 

Vancouver’s Legal Framework Doesn’t Allow Adding Bitcoin to City Reserves

The staff submitted the recommendation in a report ahead of the March 10 council meeting. Council members will review the advice and decide whether to follow it. The report states that the Vancouver Charter, which governs municipal investments, such as government debt, bonds, and other conventional financial products, does not list BTC as an allowable investment fund.

 “Staff have conclusively determined that under the Vancouver Charter, Bitcoin is not an allowable investment asset for the City, and therefore recommends that this work be concluded,” the report stated.

Vancouver’s mayor, Ken Sim, first introduced the motion “Preserving the City’s Purchasing Power Through Diversification of Financial Reserves – Becoming a Bitcoin‑Friendly City” in November 2024. The plan asked the city to accept Bitcoin for payments and convert part of its financial reserves into the cryptocurrency to protect against inflation and currency swings. The mayor also donated $10,000 worth of Bitcoin to the city to show personal commitment to the plan. 

In the same year, the Vancouver City Council approved a motion in December and asked staff to study the feasibility of creating a Bitcoin reserve. The council requested a report by the first quarter of the following year, but staff did not release the findings publicly until this week. However, after delays and legal review, officials determined Bitcoin is not permitted as a municipal reserve asset under the Vancouver Charter. Therefore, the staff recommended dropping the proposal.

Vancouver city council approves Mayor Ken Sim's motion to explore becoming a "bitcoin-friendly city," including accepting Bitcoin for taxes/fees and possibly converting part of reserves into crypto. Sim also donates $10K in Bitcoin to the city. 🚀💰

But concerns over volatility,… pic.twitter.com/6cajLVMbZg

— Crypto Spy Fox 🦊🪙 (@CryptoSpyFox) December 12, 2024

Officials Cite Risk and Resource Concerns

The staff report also highlighted practical challenges in starting a Bitcoin reserve. Officials raised the issue of the time spent working on the complex and legally ambiguous project, which could hold up progress on other issues in the city. Resource use was another factor cited for the abandonment of the plan. Despite the legal issues involved in the use of Bitcoin in public finance, the debate continues.

Proponents of the use of cryptocurrencies in finance claim that they could bring modernity and strength to the financial system. Opponents of the use of cryptocurrencies claim that the rules for the use of public finance are not yet ready for the use of cryptocurrencies, especially for highly regulated entities such as the city government. The recommendation follows earlier advice from the British Columbia Ministry of Municipal Affairs, which warned that letting local governments hold cryptocurrencies could put public funds at risk.