Vancouver mayor's bitcoin investment proposal blocked by city, provincial law

Officials say the Vancouver Charter limits city reserves to government debt, bank instruments and other traditional assets.

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What to know:

• Vancouver Mayor Ken Sim’s proposal to invest city reserves in bitcoin is not allowed under the city's charter and British Columbia’s Municipal Finance Authority Act, according to a staff report.
• Staff concluded that bitcoin is not an eligible investment asset for the city, which is restricted to conservative instruments such as government and municipal securities, bank deposits and highly rated commercial paper.
• The report leaves open the possibility that Vancouver could accept bitcoin for taxes or fees if payments are immediately converted into Canadian dollars.

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

The briefing released ahead of a March council meeting recommends closing a 2024 motion to make Vancouver a “bitcoin-friendly city,” after staff determined the plan violates municipal investment rules embedded in the city's charger. Staff wrote they “conclusively determined that under the Vancouver Charter, bitcoin is not an allowable investment asset for the City.”

The conclusion reflects the highly restrictive framework governing how Canadian municipalities can invest public funds. Section 201 of the Vancouver Charter allows the city to invest idle funds only in a narrow set of instruments, such as federal or provincial government securities, government-guaranteed bonds, municipal debt, bank-guaranteed investments, credit union deposits and certain pooled investment vehicles.

British Columbia’s Municipal Finance Authority Act reinforces the restriction.

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

The law defines eligible securities as bonds, debentures, deposit certificates and promissory notes, reflecting a framework built around fixed income and cash equivalents. Stocks, commodities and cryptocurrencies are not included.

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

While the charter regulates how city funds are invested, it does not necessarily govern how payments are processed.

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