City council is set to debate a proposal by Mayor Ken Sim to make Vancouver a “Bitcoin-friendly city” on Wednesday.
Sim’s motion would direct city staff to look into how to integrate the cryptocurrency into the city’s financial strategies, including potentially accepting taxes and fees in Bitcoin.
It would also direct staff to look into “the potential conversion of a portion of the city’s financial reserves into Bitcoin to preserve purchasing power and guard against the volatility, debasement and inflationary pressures of traditional currencies.”
Sim was unavailable for an interview on Monday.
But in an interview with the U.S.-based cryptocurrency podcast Coin Stories last week, he said he’d been “orange pilled” — that is, turned onto Bitcoin, about five years ago.
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“It really opened my eyes up to the benefits of Bitcoin and how this world with fiat (government-backed) currency is really driving off a cliff,” Sim claimed.
“The big underlying challenge is people can’t afford to live here because our currency is getting debased. We have to say something.
Werner Antweiler, a professor of economics at UBC’s Sauder School of Business, said Sim’s proposal brings a level of risk municipalities usually avoid.
“The volatility in Bitcoin 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 does go down and there is no guarantee it is preserving its value.”
Antweiler added bringing Bitcoin onto the city’s ledger sheet would likely require provincial legislative changes. The Vancouver Charter and Community Charter, which govern how B.C.’s cities operate, include specific language about how municipalities manage their money.
“The province would have to agree to that, and there is absolutely no reason why the province should agree to allow any city to invest in speculative assets, whether it is speculative stocks or Bitcoin or any other asset that has a high risk and high volatility,” he said.
“That makes no fiduciary sense.”
In a statement, the Ministry of Municipal Affairs said cryptocurrency is not currently recognized as a form of payment for municipalities.
“Local governments in British Columbia, including the City of Vancouver, aren’t able to hold financial reserves in cryptocurrency,” the statement adds.
“The intent of legislation is that local government funds are not exposed to undue risk. These funds are provided by property taxpayers and developers with the expectation that the funds will be available to provide municipal services.”
Council is set to debate the motion on Wednesday.
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