statement<\/a> that the intent of the legislation \u201cis that local government funds are not exposed to undue risk.\u201d<\/p>\n\u201cThe legal and treasury-related barriers were reportedly already understood from the outset, so the decision to end the process does not come as a real surprise\u201d Kevin Lee, chief business officer at crypto exchange Gate, told Decrypt.<\/p>\n
In Vancouver\u2019s case, the initial prospects \u201cappeared to reflect Mayor Ken Sim’s personal pro-Bitcoin vision as much as a practical municipal finance initiative,\u201d Lee added.<\/p>\n
Back then, Mayor Ken Sim defended the proposal, saying Bitcoin had been the top-performing asset \u201cover the past 16 years,\u201d arguing it should at least be considered as part of a diversified portfolio.<\/p>\n
Decrypt has reached out to the mayor\u2019s office for comment.<\/p>\n
Constraints and upsides<\/p>\n
The outcome also reflects limitations in how municipalities operate financially.<\/p>\n
\u201cDemand for Bitcoin isn\u2019t the constraint, public balance sheet mandates are,\u201d Dominick John, analyst at quantitative research firm Zeus Research, told Decrypt.<\/p>\n
Municipal treasuries are \u201cstructured for capital preservation, which keeps assets like Bitcoin outside the reserve toolkit,\u201d he said. \u201cUntil legislation, accounting treatment, and custody frameworks evolve, cities like Vancouver will remain stuck at the study.\u201d<\/p>\n
When asked whether this could set a precedent for other cities, John said it\u2019s likely the same idea would be explored elsewhere, though most proposals \u201cwill die at feasibility.\u201d<\/p>\n
This could happen \u201conly if local leaders believe there is political, branding, or ideological value in being seen as pro-crypto or pro-innovation,\u201d Gate\u2019s Lee said.<\/p>\n
That value, as in Vancouver\u2019s case, is not guaranteed, he said. \u201cOnce the political upside is weak, most of these initiatives are likely to stall at the feasibility stage.\u201d<\/p>\n
Still, crypto remains used far more as an investment than for payments, Gate’s Lee explained.<\/p>\n
\u201cGovernment payment options usually follow private sector behavior rather than lead it,\u201d he noted. \u201cIf crypto becomes widely used for everyday payments across retail, e-commerce, and services, then accepting it for taxes or municipal fees will be the natural extension.\u201d<\/p>\n
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