Vancouver mayor’s plan for bitcoin investment halted by municipal and provincial regulations.

Officials indicate that the Vancouver Charter restricts city reserves to government debt, banking instruments, and other conventional assets.

Vancouver, British Columbia (Mike Benna/Upsplash modified by CoinDesk)

Key points:

• The proposal by Vancouver Mayor Ken Sim to allocate city reserves to bitcoin investments is prohibited under the city’s charter and the Municipal Finance Authority Act of British Columbia, as stated in a staff report.
• Staff findings indicate that bitcoin does not qualify as an acceptable investment asset for the city, which is limited to conservative options like government and municipal securities, bank deposits, and highly rated commercial paper.
• The report suggests that Vancouver might be able to accept bitcoin for taxes or fees if those transactions are promptly converted to Canadian dollars.

Vancouver Mayor Ken Sim’s initiative to invest city reserves in bitcoin BTC $70,614.48 is not allowed under the Vancouver Charter and the Municipal Finance Authority Act of British Columbia, according to a staff report.

The briefing issued prior to a council meeting in March recommends dismissing a 2024 motion aimed at making Vancouver a “bitcoin-friendly city,” following staff’s determination that the proposal contravenes the municipal investment regulations outlined in the city’s charter. Staff stated they “conclusively determined that under the Vancouver Charter, bitcoin is not an allowable investment asset for the City.”

This conclusion aligns with the stringent framework regulating how Canadian municipalities can allocate public funds. Section 201 of the Vancouver Charter permits the city to invest idle funds exclusively in a limited range of instruments, including federal or provincial government securities, government-backed bonds, municipal debt, bank-guaranteed investments, credit union deposits, and certain pooled investment vehicles.

The Municipal Finance Authority Act of British Columbia reinforces these restrictions.

Municipal investment pools are confined to conservative assets such as government bonds, municipal securities, bank deposits, and highly rated commercial paper.

The legislation defines eligible securities as bonds, debentures, deposit certificates, and promissory notes, establishing a framework centered around fixed income and cash equivalents. Stocks, commodities, and cryptocurrencies are excluded.

A narrower issue remains unresolved: whether Vancouver could still achieve the softer branding goal outlined in the motion by accepting bitcoin for taxes or fees, provided the cryptocurrency is immediately converted into Canadian dollars.

While the charter regulates the investment of city funds, it does not necessarily dictate how payments are processed.