Officials in Vancouver, Canada are moving to close a proposal that would have explored adding Bitcoin to the city’s financial reserves, after a legal review determined that current laws prohibit municipalities from holding cryptocurrency as a reserve asset.
The proposal was part of a broader initiative introduced by Vancouver Mayor Ken Sim in 2024 aimed at making the city more “Bitcoin-friendly” and examining whether digital assets could help diversify municipal financial reserves.
Legal Review Blocks Bitcoin Reserve Plan
City staff concluded that Bitcoin is not an allowable investment under the Vancouver Charter, the provincial law that governs how the city manages public finances. Because the charter restricts municipal investments to specific low-risk instruments such as government bonds and bank deposits, officials said the city has no legal authority to hold cryptocurrency reserves.
The legal interpretation effectively stops the plan before any pilot program or implementation phase could begin. Staff have recommended that the city council formally close the motion and discontinue work on the proposal.
Provincial authorities in British Columbia have also confirmed that municipalities are not permitted to hold crypto reserves under current regulations, citing concerns about exposing taxpayer funds to volatile assets.
Mayor’s Vision for a “Bitcoin-Friendly” City
Mayor Sim’s original proposal, introduced in late 2024, asked city staff to explore several potential crypto initiatives, including:
Converting a portion of Vancouver’s financial reserves into Bitcoin
Allowing residents to pay municipal taxes or fees with cryptocurrency
Using Bitcoin as a potential hedge against inflation and currency debasement
Supporters argued that Bitcoin’s limited supply and global liquidity could help municipalities preserve purchasing power over time. However, critics raised concerns about price volatility, regulatory uncertainty, and the risks of placing public funds in digital assets.
What Happens Next
With the legal review now complete, Vancouver’s Bitcoin reserve initiative is expected to be formally closed unless provincial laws change. Any future attempt to hold Bitcoin in municipal reserves would require amendments to the Vancouver Charter or new provincial legislation expanding the list of permitted investments.
While the proposal will not move forward for now, the debate reflects a growing global conversation about whether governments should hold Bitcoin as part of their financial reserves. Several jurisdictions around the world have begun exploring similar ideas as digital assets gain broader recognition in financial markets.
