Vancouver city council has approved a motion brought by Mayor Ken Sim to make the city “bitcoin-friendly.” City staff will now investigate Sim’s idea of converting a portion of the city’s reserve funds to bitcoin, even though the province says it’s not allowed.
Speaking to Gloria Macarenko, the host of CBC’s On The Coast, Sim defended his position that holding bitcoin would be a smart move for Vancouver and Vancouverites. The interview has been edited for length and clarity.
Why should Vancouver become a bitcoin-friendly city?
There are a bunch of reasons, but I think the biggest one is we want to set the city up for the next 100 years … When you look at the inflationary pressures, when you look at the debasement to currencies across the planet, I think we’re going to be in a situation where we won’t be able to keep up our level of services at the City of Vancouver unless we increase taxes significantly in the future or we cut services. I’m not giving financial advice whatsoever, but it does seem like [bitcoin] could be part of the solution.
What is bitcoin? How does it work?
Bitcoin is basically … a platform. You can call it a technology. You can call it money, but it’s basically this thing that [is] decentralized; it can’t be controlled by any one person, company or country. It’s finite. So there’s only going to be 21 million bitcoin ever and that doesn’t happen until the year 2140.
And what that means is it’s basically perfect money … Think of all the individuals in our city or across North America who feel that their groceries cost twice as much as they did five years ago. It’s because the purchasing power of our dollars has gone down because governments around the world are printing more money. With bitcoin, you can’t print more of it. There’s a schedule, and it’s finite. It’s absolutely incredible.
This is Vancouver17:18Should Vancouver Become a Bitcoin-Friendly City?
Vancouver’s mayor wants the city to embrace bitcoin to attract tech and diversify the city’s revenue streams. But is the idea practical? What would it even entail? Stephen Quinn dives into those questions with UBC blockchain expert Victoria Lemieux, digital strategist Jesse McKee and OneCity executive director Giovanna Orecchio.
Are you suggesting that our groceries would be cheaper in the future if more people invested in bitcoin?
No, what I’m saying is bitcoin is the true ledger of account. It’s the only true ledger of account on the planet … If I told you that house prices haven’t changed in Vancouver since 1930, you’d think I was nuts. And when I heard that, I didn’t believe it as well. So, I ran some numbers. I went back to 1995, and in Vancouver, the average house price cost $500,000 in 1995. And in 2022, it cost $2.43 million, or it’s gone up 381 per cent.
If you had to purchase these homes in terms of gold, in 1995, it would have cost you 958 ounces of gold to buy that house, and in 2022, it would have cost you 957 ounces of gold. It basically remained the same price.
If you want to set up the city of Vancouver for success, we have to understand that relationship and then protect our city from it. So it’s not necessarily a bitcoin conversation. It could be: should the city invest in gold or should it invest in real estate or whatever to protect, preserve the capital that our city has?
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Should it?
I’m not giving investment advice. I’m going to take off my mayor’s hat off for a sec. If I were to look at it personally when I look at those three options, I actually think — and this is my own personal opinion, this is not giving anyone advice, and I’m not even saying I’m right — I would go bitcoin all day long because gold is basically an analog version of bitcoin. It’s not divisible. You can actually confiscate it. Like, there’s a whole bunch of reasons why bitcoin is far superior to gold.
BC’s ministry of municipal affairs told CBC “…local governments in British Columbia, including the City of Vancouver, aren’t able to hold financial reserves in cryptocurrency … The intent of the legislation is that local government funds are not exposed to undue risk.” What kind of work would it take through the province before Vancouver is even allowed to hold bitcoin?
It’s going to take a lot of work, but we don’t shy away from these things; we keep driving forward… As a municipality, we have a fiduciary responsibility to match our revenues with our expenses so we can run the city. No one’s denying that. What I would say is we live in a different world. Technology is moving at the speed of light. We have digital currency. I’m highly confident that this is going to be ubiquitous across the planet in the next five years.
We’ve heard financial advisers say you should only buy as much bitcoin as you’re prepared to lose. How much bitcoin is the City of Vancouver prepared to lose?
Some people will [say] it’s volatile. It’s also been the number-one performing financial asset on the planet over the last 16 years. Nothing touches it. So I think from that perspective to not even look at it would be negligent on our part. How much? We’ll leave it up to the finance professionals to do it. Look, I’m not a financial adviser, I’m not a CFA. I don’t have my Canadian securities exam designation or anything like that.
You’re not a financial adviser but you are in a power position in this city right now. You are someone who has invested in bitcoin. Are you worried you have any conflict of interest in this motion?
No, not at all. I ran this by legal counsel before we did anything. To give people context, even at the City of Vancouver — and I’m not saying we would ever do this. I actually would say we wouldn’t do this — but let’s say we put all of our assets of the city of Vancouver into bitcoin. Bitcoin trades about $60 billion a day. It wouldn’t make a dent.
Personally, do you hold investments in Coinbase, in BTCCB?
Yes, I do, and that’s fully disclosed. I disclosed that last year. And so there’s a huge level of transparency there.
How much do you own?
It’s like a minor, insignificant amount. It’s not material.
Who’s advising you on this?
I self-advise myself on these issues.