Vancouver passes BTC reserve plan! Experts: Current laws do not allow it, big dump may affect municipal reserves.

Former Vancouver Mayor Ken Sim proposed the “BTC Friendly City” plan to the Vancouver City Council, aiming to “include BTC in municipal finances.” The proposal was successfully passed on 12/11. However, government officials and experts, including local governments such as Vancouver, have stated that BTC cannot be used as a financial reserve, causing widespread discussion.

Vancouver passes BTC financial reserve plan

According to previous reports, Sim had previously submitted the ‘BTC Financial Reserve’ plan to the Vancouver City Council. Due to the majority control of the council by the ABC Party to which Sim belongs, the likelihood of the proposal being approved is not small. On 12/11, the City Council officially passed this plan and will continue to explore the possibility of using BTC for local municipal purposes. In a phone interview, Sim also stated, ‘As the United States gradually becomes more friendly towards cryptocurrencies and other countries follow suit, we certainly need to join in.’

Current Canadian law does not allow BTC financial reserves.

Although the BTC reserve proposal in Vancouver has been approved, it is likely not allowed by Canadian law for local governments to use BTC as a reserve. According to a spokesperson for the Canadian Ministry of Municipal Affairs and Housing quoted by foreign media, the Community Charter and Vancouver Charter of the province do not recognize the use of cryptocurrency as a payment method for “municipal fees or other transactions”. Local governments also do not allow the use of cryptocurrency as a financial reserve.

The spokesperson explained, “The law has already stipulated that whether government agencies use public funds for investment or reinvestment, cryptocurrencies cannot be approved. The purpose is to prevent unnecessary risks to local government funds.”

Scholars say that BTC has high volatility, and a sharp drop may lead to a shortage of municipal funds.

Some scholars also believe that although the value of cryptocurrency has increased significantly, it does not necessarily make it suitable as a financial reserve for municipal governments. For example, if a local government accepts BTC as a method of paying property taxes and incorporates these BTC into its reserve fund.

However, the value of Bitcoin suddenly plummeted at a certain point in time, just when the government needed to use this fund, leading to an immediate funding shortage issue. ‘To be honest, using BTC as a financial reserve is very risky,’ the scholar said.

(With the rise of digital gold, can BTC replace gold as a national reserve or de-dollarization tool?)

This article Vancouver passes BTC reserve plan! Expert: Current laws do not allow it, and a sharp decline may affect municipal reserves. It first appeared on Chain News ABMedia.