Vancouver Mayor Ken Sim has signaled his intention to adopt Bitcoin, warming his way to the leading digital asset. The Vancouver Mayor is seriously considering adding the asset to the city’s financial strategy. In his proposal, he wants to use Bitcoin as a tool to protect the city’s purchasing power and as a means of diversifying its financial reserve. His proposal is set to be deliberated on by the City Council on December 11.
In his proposal titled Preserving the City’s Purchasing Power Through Diversification of Financial Reserves – Becoming a Bitcoin-Friendly City,” he pitches Bitcoin as an innovation that will help the economy in a future filled with uncertainties. In a City Council meeting, Sim made his case about Bitcoin, pointing to its growth in the last 16 years as proof.
Vancouver Mayor discusses Bitcoin’s role in its future
Vancouver Mayor Ken Sim also drummed up the possible consequences of missing out on Bitcoin, highlighting that it would be ‘irresponsible’ for the city not to consider the asset. He called Bitcoin the greatest innovation in the financial landscape, calling on all cities to watch and copy Vancouver as they look set to make history. His proposal, submitted to the City Council, wants to adopt Bitcoin to tackle inflation.
According to Sim, Bitcoin assures financial resilience, discussing its supply, which is capped at 21 million. He noted that while Bitcoin production will stop at the capped figure, it gives it an edge against traditional currencies whose supply is endless. While noting that inflation could wipe away people’s purchasing power, Sim argued that Bitcoin could be the perfect shield against it.
Sim’s Bitcoin proposal encounters criticism
While Sim’s strategy looks to talk more about tackling inflation, it centers around diversification. The Mayor notes that Vancouver’s investments in traditional assets are good, but are vulnerable to economic shocks. By reducing the city’s reliance on them, Sim argued that it puts them on a great path. However, like with every proposal, there are some people against Sim’s plans.
With the proposal raising eyebrows, the asset’s volatility is one of the talking points. Bitcoin has always experienced dramatic drops, with its 80% drop between November 2021 and 2022 a typical example. Critics claim that its volatile nature is one reason it cannot be the city’s financial foundation. Another issue is the assets lack intrinsic value. With gold, there is a store of value to rely on in the years to come, but Bitcoin has no physical backing.
Economists have always ripped into Bitcoin for this reason, highlighting the possibility of the asset holding its long-term value. The asset differs from gold as it lacks the industrial or historical backing that the precious metal has. The asset’s liquidity is another valuable concern, with most critics claiming it needs to be accessible during emergencies. Bitcoin’s value depends on the trader’s ability to hold long-term, with critics saying it makes it unsuitable as a financial safety net.
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