Vancouver Moves to Close Bitcoin Reserve Proposal After Legal Review

In brief

• City staff have concluded the Vancouver Charter does not allow Bitcoin in city reserves.
• The motion followed a late 2024 decree by Mayor Ken Sim to study crypto use.
• Municipal finance rules keep assets like Bitcoin outside treasuries, Decrypt was told.

Vancouver staff have recommended closing a council motion that explored whether the city could become “Bitcoin-friendly,” after determining that its rules don’t allow the crypto to be held as a municipal reserve asset. The recommendation appears in a report to the council reviewing outstanding member motions, where staff said they had “conclusively determined” that Bitcoin is not “an allowable investment asset,” recommending the motion be closed as part of a broader reprioritization of staff resources and efforts. Staff cited the Vancouver Charter, the provincial law that governs how the city operates, including how municipal funds can be invested, which does not permit the city to hold Bitcoin as a reserve asset, limiting Vancouver’s ability to pursue the proposal. 

The motion’s sole opponent on council, Pete Fry, told local media he assumed the proposal had already been shelved and was surprised to see it referenced in the report. “I already thought it was dead in the water,” he said. “It was probably good closure to have it mentioned in here, but I don’t even know that it was entirely necessary.” The recommendation comes more than a year after Vancouver council initially backed a motion from Mayor Ken Sim directing staff to study whether the city could become a “Bitcoin-friendly city.” At the time, the proposal asked officials to examine accepting taxes and fees in crypto, and the possibility of converting part of the city’s financial reserves into Bitcoin.

But the proposal had faced legal limits right off the start. The British Columbia Ministry of Municipal Affairs said at the time that municipalities cannot hold financial reserves in crypto under provincial rules, adding in a statement that the intent of the legislation “is that local government funds are not exposed to undue risk.” “The legal and treasury-related barriers were reportedly already understood from the outset, so the decision to end the process does not come as a real surprise” Kevin Lee, chief business officer at crypto exchange Gate, told Decrypt. In Vancouver’s case, the initial prospects “appeared to reflect Mayor Ken Sim’s personal pro-Bitcoin vision as much as a practical municipal finance initiative,” Lee added. Back then, Mayor Ken Sim defended the proposal, saying Bitcoin had been the top-performing asset “over the past 16 years,” arguing it should at least be considered as part of a diversified portfolio. Decrypt has reached out to the mayor’s office for comment. Constraints and upsides The outcome also reflects limitations in how municipalities operate financially. “Demand for Bitcoin isn’t the constraint, public balance sheet mandates are,” Dominick John, analyst at quantitative research firm Zeus Research, told Decrypt.

Municipal treasuries are “structured for capital preservation, which keeps assets like Bitcoin outside the reserve toolkit,” he said. “Until legislation, accounting treatment, and custody frameworks evolve, cities like Vancouver will remain stuck at the study.” When asked whether this could set a precedent for other cities, John said it’s likely the same idea would be explored elsewhere, though most proposals “will die at feasibility.” This could happen “only if local leaders believe there is political, branding, or ideological value in being seen as pro-crypto or pro-innovation,” Gate’s Lee said. That value, as in Vancouver’s case, is not guaranteed, he said. “Once the political upside is weak, most of these initiatives are likely to stall at the feasibility stage.” Still, crypto remains used far more as an investment than for payments, Gate’s Lee explained. “Government payment options usually follow private sector behavior rather than lead it,” he noted. “If crypto becomes widely used for everyday payments across retail, e-commerce, and services, then accepting it for taxes or municipal fees will be the natural extension.”