Vancouver Mayor Ken Sim’s proposal to allocate city reserves towards investing in bitcoin has encountered significant legal hurdles. A recent staff report highlights that this investment strategy is not permissible under the Vancouver Charter and British Columbia’s Municipal Finance Authority Act.
The report, prepared ahead of a council meeting scheduled for March, advises against pursuing a motion aimed at making Vancouver a “bitcoin-friendly city.” Municipal staff have determined that, according to the Vancouver Charter, bitcoin does not qualify as an allowable investment asset for the city. This conclusion underscores the stringent regulations that govern how Canadian municipalities are permitted to manage public funds.
According to Section 201 of the Vancouver Charter, the city is limited to investing idle funds in a select range of financial instruments. These include federal or provincial government securities, guaranteed bonds, municipal debts, bank-backed investments, credit union deposits, and certain pooled investment vehicles. Such a framework reinforces the city’s obligation to prioritize conservative investment choices.
British Columbia’s Municipal Finance Authority Act further establishes these restrictions, mandating that municipal investment pools contain only low-risk assets like government bonds, municipal securities, bank deposits, and highly rated commercial paper. The legal definitions of eligible securities include bonds, debentures, deposit certificates, and promissory notes—effectively excluding stocks, commodities, and cryptocurrencies from the realm of acceptable investments.
An additional question remains regarding the potential for Vancouver to adopt a more flexible approach through its payment processing. While the charter tightly regulates investment avenues, it does not necessarily restrict how the city can accept payments. This raises the possibility that the city could potentially accept bitcoin for certain taxes or fees, provided that the cryptocurrency is immediately converted into Canadian dollars.
This scenario represents a distinct path that could keep the city aligned with its financial regulations while exploring the more modern landscape of cryptocurrency. However, the broader ambition of investing city funds into bitcoin remains firmly off the table amid current legal constraints. This situation reflects ongoing debates within municipal governance about the adaptation to emerging financial technologies and the need for updated frameworks to accommodate them.
