Vancouver Moves to Close Bitcoin Reserve Proposal After Legal Review

Vancouver officials have recommended finalizing a council motion exploring whether the city could become “Bitcoin-friendly” after finding that rules do not allow the crypto to be held as a municipal reserve.

The recommendation appears in a report to the council reviewing outstanding member motions, with staff saying they had “conclusively determined” that Bitcoin is not a “permitted investment asset,” recommending the motion be closed as part of a broader reprioritization of staff resources and efforts.

The staff mentioned the Vancouver Charterthe provincial law that governs how the city functions, including how municipal funds can be invested, prevents the city from holding Bitcoin as a reserve, limiting Vancouver’s ability to pursue the proposal.

The only opponent of the motion in the council, Pete Fry, told He assumed in local media that the proposal was already on the table and was surprised to see it referenced in the report.

“I thought it was dead in the water,” he said. “It was probably a good ending to mention it here, but I’m not even sure it was necessary at all.”

The recommendation comes more than a year after Vancouver City Council’s initial decision supported a motion by Mayor Ken Sim directing staff to investigate whether the city can become a ‘Bitcoin-friendly city’.

At the time, the proposal asked officials to explore accepting taxes and fees in crypto, and the possibility of converting some of the city’s financial reserves into Bitcoin.

But the proposal has faced legal limitations from the start.

British Columbia’s Ministry of Municipal Affairs said at the time that municipalities cannot maintain financial reserves in crypto under provincial rules, adding: statement that the intent of the legislation “is to ensure that local government funds are not exposed to unnecessary risks.”

“The legal and treasury-related barriers were reportedly clear from the start, so the decision to end the process comes as no real surprise,” Kevin Lee, chief business officer at crypto exchange Gate, told me. Declutter.

In Vancouver’s case, the initial outlook “seemed to reflect Mayor Ken Sim’s personal pro-Bitcoin vision as much as a practical municipal finance initiative,” Lee added.

At the time, Mayor Ken Sim defended the proposal, saying Bitcoin was the best-performing asset “over the past 16 years,” arguing that it should at least be considered part of a diversified portfolio.

Declutter has contacted the mayor’s office for comment.

Limitations and advantages

The outcome also reflects the limitations in the way municipalities operate financially.

“Bitcoin demand is not the constraint, but public balance sheet mandates are,” Dominick John, an analyst at quantitative research firm Zeus Research, told me. Declutter.

Municipal treasuries are “structured for capital preservation, leaving assets like Bitcoin out of the reserve toolkit,” he said. “Until legislation, accounting treatment and guardianship frameworks evolve, cities like Vancouver will remain stuck in the loop.”

When asked if this could set a precedent for other cities, John said it’s likely the same idea will be explored elsewhere, although most proposals “will disappear due to their feasibility.”

This could “only happen 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 advantage is weak, most of these initiatives are likely to stall at the feasibility stage.”

Yet crypto is still used much more as an investment than for payments, explains Gate’s Lee.

“Government payment options typically follow rather than lead private sector behavior,” he noted. “If crypto becomes widely used for everyday payments in retail, e-commerce and services, then accepting it for taxes or municipal fees will be the natural extension.”