Vancouver City Council Approves Motion to Explore Bitcoin Adoption

Jimmy Aki
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Vancouver City Council has made headlines by approving a motion to assess Bitcoin as part of its financial strategy.

The initiative, introduced by Mayor Ken Sim, aims to evaluate the feasibility of accepting taxes and fees in Bitcoin and investing part of the city’s $3.1 billion reserves into Bitcoin.

Vancouver City Bitcoin Adoption Plans And Mayor Ken Sim’s Vision for Financial Resilience

During the December 10 council meeting, the motion passed with six votes in favor, two opposed, and three absentees.

The proposal highlights Bitcoin as a potential safeguard against inflation and traditional currency volatility.

“Diversifying the City of Vancouver’s financial reserves and payment options to include Bitcoin would not only enhance the resilience of our financial portfolio but also benefit taxpayers,” the motion stated.

In his address to the council, Mayor Sim emphasized Bitcoin’s potential to address affordability challenges and secure the city’s future.

Citing the devaluation of fixed-income securities and stagnant gold values compared to real estate growth, Sim argued for Bitcoin’s adoption to preserve purchasing power.

“There is something going on here; our currency is getting debased, and we are losing our purchasing power,” Sim remarked.

As a demonstration of commitment, he pledged a $10,000 Bitcoin donation to the city, regardless of the vote outcome.

The approved motion directs city staff to evaluate the potential risks and benefits of Bitcoin adoption.

This includes exploring Bitcoin’s utility as a payment option for taxes and fees and its viability as a reserve asset to diversify the city’s financial portfolio.

City staff must submit their findings by the end of the first quarter (Q1) 2025.

The evaluation will consider factors such as Bitcoin’s volatility, legal challenges, and its long-term sustainability as a reserve asset.

Legal and Practical Hurdles Ahead of Vancouver City’s Bitcoin Adoption

Despite the council’s optimism, implementing Bitcoin into the Council’s operation won’t be easy. The Bank of Canada’s Currency Act prohibits municipalities from holding cryptocurrencies as reserves or using them for expenditures.

Under Canadian law, cryptocurrencies are classified as commodities, limiting their role in official financial portfolios.

However, Section 27.1 of the Bank of Canada Act provides for a special reserve fund to absorb valuation losses in the Bank’s investment portfolio.

While this provision does not directly address cryptocurrencies, it presents a potential avenue for the Bank to consider such assets in the future.

Experts believe that legislative changes would be required to fully implement Vancouver’s Bitcoin strategy.

Vancouver’s initiative mirrors a growing global trend of governments and institutions exploring Bitcoin adoption.

Countries like Russia, Brazil, and Poland are actively considering Bitcoin as a reserve asset, while the U.S. has seen legislative efforts led by Senator Cynthia Lummis advocating for cryptocurrency integration.

Asset manager Bitwise predicts that by 2025, at least 18 countries will hold Bitcoin in their reserves.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.