Previously, Vancouver Mayor Ken Sim proposed the 'Bitcoin Friendly City' plan to integrate Bitcoin into municipal finances. This proposal was successfully passed on 12/11. However, some government officials and scholars have indicated that local governments, including Vancouver, are not allowed to use Bitcoin as a financial reserve, sparking public debate.
Vancouver passes Bitcoin financial reserve plan
According to previous reports, Sim had already proposed the 'Bitcoin Financial Reserve' plan to the Vancouver City Council. Since Sim's ABC party holds a majority in the council, the chances of the proposal passing are considerable. On 12/11, the city council officially approved this plan and continues to explore the potential uses of Bitcoin for local municipal purposes. Sim also stated in a telephone interview: 'As the United States becomes increasingly friendly towards cryptocurrency, and other countries follow suit, we certainly want to join in.'
Current Canadian laws do not allow Bitcoin financial reserves
Although Vancouver's Bitcoin reserve proposal has been approved, current Canadian laws may not permit local governments to use Bitcoin as a reserve. According to foreign media quoting a spokesperson from the Canadian Ministry of Municipal Affairs and Housing, the province's Community Charter and Vancouver Charter do not recognize cryptocurrency as a payment method for 'municipal expenses or other transactions.' Local governments are also not allowed to use cryptocurrency as a financial reserve.
The spokesperson explained: 'The law has stipulated that regardless of whether government agencies are using public funds for investment or reinvestment, cryptocurrency cannot be approved. The purpose is to prevent local government funds from facing unnecessary risks.'
Scholars indicate that Bitcoin's volatility is high, and a crash could lead to a shortage of municipal funds
Some scholars have also indicated that although the value of cryptocurrency has significantly increased, this does not mean it is suitable as a municipal financial reserve. They cite an example where, if a local government accepts Bitcoin as a payment method for property taxes and incorporates that Bitcoin as part of its reserves.
However, if the value of Bitcoin suddenly plummets at a certain point in time, when the government also needs to use these funds, a shortage of funds could immediately arise. 'Honestly, using Bitcoin as a financial reserve is very dangerous,' scholars have stated.
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This article: Vancouver passes Bitcoin reserve plan! Experts: Current laws do not allow it, and a crash could affect municipal reserves. Originally appeared in Chain News ABMedia.
