Key Insights:
- Vancouver Bitcoin reserve plan halted after legal review.
- Vancouver staff concluded that Bitcoin is not an allowable investment asset.
- The municipalities are prohibited by provincial rules from having crypto reserves.
Vancouver city staff have recommended closing a council motion that examined whether the city could adopt policies aimed at becoming more “Bitcoin-friendly,” after concluding that municipal rules do not permit the cryptocurrency to be held as part of the city’s financial reserves.
Vancouver Bitcoin Reserve Proposal Blocked by Charter Rules
The finding effectively blocks the proposal, which had explored positioning Vancouver as a “Bitcoin-friendly” city while evaluating whether digital assets could help protect municipal finances from inflation.
The recommendation appears in a briefing report reviewing outstanding council member motions. City staff stated that their legal and financial assessment determined that Bitcoin does not qualify as an allowable investment under existing municipal rules. As a result, staff recommended closing the motion as part of a broader process to reprioritize city resources and conclude initiatives that cannot proceed under the current regulatory structure.
According to the report, the determination follows a review of provincial legislation governing municipal financial practices, which sets strict limits on how local governments can invest public funds. The proposal faced a key legal barrier under the Vancouver Charter, the provincial legislation that defines the city’s authority and outlines how municipal finances must be managed.
Officials concluded that the charter does not permit the city to hold Bitcoin or similar digital assets as part of its financial reserves. City staff stated in the report that the legal review reached a definitive conclusion regarding the asset’s eligibility.
“Staff has conclusively determined that under the Vancouver Charter, Bitcoin is not an allowable investment asset for the city, and therefore recommends that this work be concluded,” the report stated.
The charter establishes the types of financial instruments municipalities can hold when managing public funds. The city’s review also considered the British Columbia Municipal Finance Authority Act, which governs municipal borrowing and investment practices across the province.
Officials said the legislation reinforces restrictions on holding assets that fall outside approved categories. As a result, Vancouver staff advised the council that the proposed Bitcoin reserve initiative cannot proceed under the current legal framework.
Legal Framework Limits Vancouver Bitcoin Reserve Plan
The Vancouver Bitcoin reserve plan had been introduced as a council motion in 2024. The proposal examined whether the city could pursue policies intended to position Vancouver as a “Bitcoin-friendly city.” Among the objectives discussed at the time was the potential use of Bitcoin as an inflation hedge.
At the time, the motion described Bitcoin as a potential financial tool for protecting municipal reserves against inflation and currency debasement. The proposal cited the cryptocurrency’s fixed supply as a reason some analysts consider it comparable to scarce commodities.
“As an open, decentralized, and secure digital asset, Bitcoin has been recognized by many financial experts and analysts as a potential hedge against inflation and currency debasement,” the motion stated.
Bitcoin’s total supply is capped at 21 million coins, a feature that supporters often cite when comparing the asset to traditional stores of value. However, city staff concluded that regardless of the asset’s characteristics, municipal investment rules prevent Vancouver from holding it as part of its reserves.
Provincial Government Reinforced Restrictions on Crypto Holdings
Provincial authorities also clarified that municipalities in British Columbia cannot store reserve funds in cryptocurrency under existing financial regulations. The British Columbia Ministry of Municipal Affairs previously stated that local governments are restricted from holding digital assets as reserve investments.
Nevertheless, officials explained that the rules are intended to protect public funds from exposure to assets considered outside traditional financial safeguards. In a statement, the ministry said the legislative framework ensures that municipal finances remain protected from unnecessary financial risk. “The legislation intends that local government funds are not exposed to undue risk,” the ministry said.
The ministry’s position reinforced the conclusions reached in Vancouver’s internal review, confirming that the Bitcoin reserve proposal does not align with provincial rules governing municipal investments.
Macroeconomist Lyn Alden commented on the topic during an appearance on the New Era Finance podcast, stating that she would favor Bitcoin over gold over the next several years. “If I had to bet Bitcoin versus gold over the next two to three years, I would bet Bitcoin,” Alden said.
