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.
"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."
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 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.
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.”
