Vancouver city council voted to explore ways to make the municipality a “Bitcoin-friendly city.”
The motion approved on Wednesday It won’t mean the city is investing in or accepting payments in cryptocurrency any time soon, but rather it will direct staff to investigate those possibilities.
The proposal passed along party lines with Mayor Ken Sim, who proposed the initiative, and his ABC Vancouver councilors in favour, and two Green councilors in opposition.
Thirty-four people signed up to speak on the motion, many of them enthusiastic supporters of the technology.
In an interview with Global News before the vote, Sim, an avowed crypto evangelist, said exploring the idea was “the most responsible thing to do.”
“Bitcoin is the highest-performing asset on the planet for the last 16 years, so not even considering including it as part of a diversified portfolio is, I think, reckless,” he said.
“Let’s put it this way: it is inevitable that this (widespread adoption of Bitcoin) will happen. So I think the decision for Vancouver, the province and the country is: do we want to be leaders or do we want to be left behind?
The mayor told Global News that he believes the cost of living is rising because government-backed currencies are “degrading,” something cryptocurrencies could protect against.
Sim, who said he used to be a cryptocurrency skeptic, claimed to have spent “10,000 hours” researching the topic and acknowledged that it “represents a portion of our family’s portfolio.”
The mayor’s financial disclosure for 2024 shows investments in Coinbase Global, a cryptocurrency trading platform, and Purpose Bitcoin ETF, a Canadian Bitcoin exchange-traded fund.
On Wednesday, he pledged to make a donation of $10,000 in Bitcoin to the city, regardless of the outcome of the vote.
Count ABC. Peter Meiszner voted in favor of the motion, saying he was interested in what the staff would bring in their report, but still harbors some skepticism about cryptocurrencies.
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“I am aware that there is a significant difference between Vancouver residents investing their own money in cryptocurrency and the city doing the same with public money,” he said.
Green County. Pete Fry said he could not support the motion because it did not mention the potential use of Bitcoin for money laundering, a problem he said underpins both the city’s drug and housing crises.
“In 2019, the VPD came to this council and asked us to ban Bitcoin ATMs over concerns about money laundering; in May of this year (Canadian financial regulator) FINTRAC was warning the same thing with Bitcoin ATMs. Bitcoin,” he said. saying.
“The RCMP, Europol, Interpol and the Department of Justice warn of links between cryptocurrencies and decentralized digital aspects and money laundering, drugs and even terrorism.”
Fry’s caucus colleague Adriane Carr also objected to environmental concerns about Bitcoin, which requires large volumes of electricity to mine and trade.
“There is a lot of concern about the use of electricity, for example from our hydroelectric network,” he said.
“We’ve had conversations in this council chamber about concerns about the supply of electricity,” he added, pointing to the council’s recent debate on allowing natural gas in new home construction.
Carr further questioned how safe Bitcoin was as an investment.
While the cryptocurrency is currently trading at record levels, it is known for its high volatility and large price swings.
This time last year, Bitcoin was trading at less than a third of its current value.
Earlier this week, UBC economics professor Werner Antweiler told Global News that investing in cryptocurrencies is a high-risk venture of the type that municipalities typically avoid.
“Bitcoin’s volatility is in the same league as some of the highest volatility tech stocks like Tesla and NVIDIA and others,” he said.
“It is a speculative asset like any other stock, the value can go up and down and there is no guarantee that it is preserving its value.”
City staff are expected to return with a report by the end of the first quarter of 2025.
Regardless of what that report includes, the concept of making Vancouver a Bitcoin-friendly city will still face major obstacles: first and foremost, provincial laws.
In a statement to Global News, the Ministry of Municipal Affairs said that cryptocurrencies are not currently recognized as a form of payment for municipalities.
“Local governments in British Columbia, including the City of Vancouver, are not permitted to hold financial reserves in cryptocurrency,” the statement added.
“The intent of the legislation is that local government funds are not exposed to undue risk. “These funds are provided by real estate taxpayers and developers with the expectation that the funds will be available to provide municipal services.”
Sim brushed aside that concern, telling Global News that being an early adopter means pushing boundaries.
“Governments have to catch up,” he said.
“Because I can tell you that when we wake up five to ten years from now, this will be ubiquitous across the entire planet.”
