Starting this April, Innisfil residents will be able to pay their taxes in cryptocurrency, or Bitcoin, marking the first time a Canadian municipality has allowed this.
Innisfil council is describing its agreement with Toronto-based Coinberry Ltd., as a “public-private partnership” that will now move forward with a one-year pilot project.
Coinberry president and CEO Andre Poliakov made a special presentation to council on Wednesday, proposing cryptocurrency as an “addition to the methods of payment, to give residents more options and more choices.”
In support, Poliakov presented a video from a property owner at Friday Harbour.
Dr. Evan Hill, who described himself as developing a global company that may receive payment in Bitcoin, expressed support, noting that with Bitcoin, “it’s so much easier, less costly” to transfer money. Hill praised Innisfil for its “forward-thinking innovation.”
“There is a real demand for this,” Poliakov told council, noting that Bitcoin, created in 2008, is “our most popular cryptocurrency,” but not the only cryptocurrency in use.
There are currently 32 million Bitcoin “wallets” worldwide, Poliakov said, and statistics suggest that more than five per cent of Canadians held Bitcoin in 2018.
As for his own company, which focuses on the blockchain and provides a platform for cryptocurrency exchange, Poliakov indicated Coinberry currently has more than 15,000 users.
The partnership involves no risk for the municipality, councillors were told. Payments in Bitcoin or other currencies would be immediately transferred to Canadian dollars by Coinberry, and paid to the town, so that Innisfil is “not exposed to the Bitcoin at any time.”
Asked about fees, Poliakov indicated his company charges the user only, taking a small percentage of value.
“It’s a whole new way of approaching finances,” said the town’s CAO Jason Reynar. “The risk is almost zero.”
Councillors questioned the working of cryptocurrency exchange, and the issue of potential money-laundering.
Poliakov assured the town his company is registered with FINTRAC, which has anti-money laundering procedures and policies in place.
“We work very closely with our banking partners,” he said.
In the end, despite some reservations, council voted unanimously to support a one-year trial. Starting in April, a new option will appear on the town’s website, giving residents the option of paying taxes in Bitcoin. Other cryptocurrencies may be added in future.
Coun. Kevin Eisses raised the issue of the town’s procurement policy, and the wisdom of signing a deal with a single company. “(Are) there other options, where we would tender it out?” he asked.
Reynar noted that what was proposed was a one-year pilot only.
“Presumably, at the end of that year, there would be a tendering,” through the town’s procurement process, if the pilot was a success,” he said.
Treasurer Lockie Davis agreed. “The pilot project will allow us to work out some kinks” in the payment process, he said. The town could then look at other platforms, “if there are any.”
“I think I have enough assurance for a one-year pilot,” said Coun. Alex Waters, admitting, “I am nervous because it is new. I am fearful that we’re doing it just to be innovative.”
“I think we should try it for a year,” said Coun. Bill Van Berkel. “We’re not going to lose on it.”
“I thought it was a little crazy. However, after listening to the presentation, it’s a payment option,” said Coun. Donna Orsatti. “I like the fact that it’s a pilot, it’s an optional choice, it’s saving the town money… We are in the age of technology.”
Eisses, although he voted in favour of the pilot project, warned against jumping on board innovations just to be thought innovative.
“I’m pretty sure there were no residents who requested cryptocurrency,” he said.
In a press release, Mayor Lynn Dollin said the town is “proud to be first in taking this bold step by offering this new, exciting payment option to our residents.”
“There’s no doubt that cryptocurrency is growing in usage and popularity,” she wrote. “By getting into this now, we are making sure our municipality is ahead of the game, and signalling to the world that we truly are a future-ready and innovative community."
