Vancouver Mayor Proposes Using Bitcoin in City Finances

(Bloomberg) -- Vancouver may try to integrate Bitcoin into city finances just as the digital token’s value is surging, a rally fueled by US President-elect Donald Trump’s support for crypto.

City council will consider a motion on Dec. 11 from Mayor Ken Sim titled “Preserving of the city’s purchasing power through diversification of financial reserves – becoming a Bitcoin friendly city.” Sim’s ABC Vancouver party has a majority of the 11 votes on council. 

If successful, the motion would direct city staff to analyze the potential of integrating the cryptocurrency, for instance by accepting taxes and fees in Bitcoin, or converting some of its financial reserves into Bitcoin. 

The west coast Canadian city has long been a crypto hub, with a claim to the world’s first Bitcoin ATM in 2013, and home to blockchain startups like nonfungible token company Dapper Labs Inc.

Sim’s motion describes the supposed benefits accruing to other local and national governments that have embraced Bitcoin, from El Salvador — which made Bitcoin legal tender in 2021 — to the Swiss canton of Zug, which started accepting Bitcoin for taxes.

The proposal argues that integrating Bitcoin signals a pro-innovation agenda and preserves the city’s purchasing power against the “volatility, debasement and inflationary pressures” of traditional currencies.

The motion also says the electricity-hungry process of Bitcoin mining has “shown environmental benefits” by consuming excess energy from stranded renewables and waste methane, “thus reducing emissions,” as well as making renewable energy projects financially viable.

Some studies challenge that argument. In 2022, the province of British Columbia, where Vancouver is located, placed a temporary moratorium on new cryptocurrency mining to preserve its hydro-electricity supply, with a government statement warning that “the unchecked growth of cryptocurrency mining operations in BC could make it more difficult” to meet clean electrification goals and keep customer rates low. 

Sim shared his enthusiasm for the digital token in a YouTube interview posted on Wednesday, in which he said Bitcoin is “the greatest invention ever in human history,” it has been “de-risked” by recent developments, and that “fiat’s going to zero” — referring to conventional government-issued and backed currencies. 

The mayor had investments in Bitcoin miner MGT Capital Investments Inc., a Bitcoin exchange-traded fund, and crypto trading platform Coinbase Global Inc., according to his most recent financial disclosure form signed in January — though he sold the MGT holding the following month, his spokesperson Zoe Frankcom said by email.

“Mayor Sim has consulted with both the Auditor General and an independent lawyer to confirm there is no conflict of interest related to his motion,” said Frankcom. “Based on their advice, the Mayor is able to table, attend the meeting, and vote on this motion in accordance with the Vancouver Charter.”

If officials ultimately pursue Bitcoin adoption, they might need to consider legislative changes.

“At this time, neither the Community Charter nor the Vancouver Charter recognizes the use of cryptocurrency as a form of payment for municipal services or other transactions,” a spokesperson for British Columbia’s Ministry of Housing and Municipal Affairs said by email.

(Updates with statements from mayor’s spokesperson and BC government beginning in 10th paragraph)

©2024 Bloomberg L.P.