Vancouver Staff Say Bitcoin Reserve Plan Violates Law, Urge Council to Drop Proposal

A proposal to add Bitcoin to Vancouver’s municipal reserves has hit a legal wall, with city staff advising council to abandon the initiative entirely.

The recommendation comes ahead of a March 10 council meeting, where officials will consider closing a 2024 motion that explored turning Vancouver into a “Bitcoin-friendly city.”

The plan was championed by Mayor Ken Sim, who had pushed for the city to study allocating part of its financial reserves into the digital asset. However, a legal review concluded that the city cannot legally hold Bitcoin as a reserve asset under existing municipal laws.

• Vancouver staff say the Bitcoin reserve plan violates the law, urging council to drop the proposal.

• Mayor Sim’s 2024 plan to diversify city funds with Bitcoin faces legal barriers.

• Current rules allow only safe assets, such as bonds and deposits, but not crypto.

• Bitcoin could still serve payment use, but not for holding it in reserves.

According to the staff report, the city’s governing legislation strictly limits the types of assets municipal funds can invest in.

Under the Vancouver Charter, the city can only invest idle funds in a small range of traditional options, like government securities, municipal bonds, bank-guaranteed investments, credit-union deposits, and certain pooled funds.

The Municipal Finance Authority Act of British Columbia also limits municipal investment pools to safe assets, such as government bonds, highly rated commercial paper, and bank deposits.

Since cryptocurrencies, stocks, and commodities aren’t included, staff concluded that Bitcoin cannot legally be part of the city’s reserve funds. The report says officials “conclusively determined” that Bitcoin is not an allowed investment under current rules.

Mayor Sim’s proposal, first introduced in late 2024, aimed to diversify the city’s financial reserves and protect purchasing power by adding exposure to Bitcoin. He had previously described the cryptocurrency as one of the most important inventions in modern finance and even pledged to donate $10,000 worth of Bitcoin to the city.

The proposal’s failure shows the challenge for public institutions. Municipal treasuries focus on preserving capital, using low-risk, stable investments. Until laws change, cryptocurrencies like Bitcoin can’t be included in city reserves.

While holding Bitcoin in reserve appears legally impossible for now, the city might still accept it for payments. The Vancouver Charter regulates investments, not how payments are made. Residents could eventually pay taxes or fees in Bitcoin, as long as it’s quickly converted to Canadian dollars.

Notably, the plan to create a Bitcoin reserve will likely end when the council votes on the staff recommendation next week.