Vancouver passes Bitcoin reserve plan! Expert: The current law does not allow it, and the plunge may affect municipal reserves

Former Vancouver Mayor Ken Sim proposed a "Bitcoin-Friendly City" plan to the Vancouver City Council, aiming to "incorporate Bit into the city's finances". This proposal was also successfully passed on 12/11. However, some government officials and experts have stated that local governments, including Vancouver, should not use Bit as a financial reserve, sparking widespread discussion.

Vancouver Passes Bit Financial Reserve Plan

According to previous reports, Sim had previously proposed a "Bit financial reserve" plan to the Vancouver City Council, and since Sim's ABC party controls the majority of the council, the proposal had a good chance of being passed. And on 12/11, the city council officially passed this plan and continued to explore the potential of Bit for local municipal use. Sim also stated in a telephone interview: "As the US becomes more friendly to cryptocurrencies, and other countries are also following suit, we naturally have to join in."

Current Canadian Laws Do Not Allow Bit Financial Reserves

Although the current Bit reserve proposal in Vancouver has been passed, according to Canada's current laws, it is unlikely that local governments will be allowed to use Bit as a reserve. According to foreign media citing a spokesperson from the Canadian Ministry of Municipal Affairs and Housing, under the province's Community Charter and the Vancouver Charter, cryptocurrencies are not recognized as a payment method for "municipal fees or other transactions". Local governments are also not allowed to use cryptocurrencies as financial reserves.

The spokesperson explained: "The law has already stipulated that regardless of whether government agencies are investing or reinvesting public funds, cryptocurrencies simply cannot be approved. The purpose is to prevent local governments' funds from facing unnecessary risks."

Scholars Indicate Bit's High Volatility, Crash May Cause Municipal Fund Shortages

Some scholars also stated that although the value of cryptocurrencies has grown significantly, this does not mean that they are suitable as financial reserves for municipalities. The scholar gave an example, supposing the local government accepts Bit as a way to pay property taxes, and incorporates these Bit into the reserve fund.

But if the value of Bit suddenly plummets at a certain point in time, and the government happens to need to use this fund, a fund shortage problem will immediately arise. "I must say, using Bit as a financial reserve is very dangerous," the scholar stated.

(The Rise of Digital Gold, Can Bit Replace Gold as a National Reserve or De-dollarization Tool?)