Canada’s central bank is significantly tightening the rules governing stablecoins. According to the Bank of Canada, only high-quality stablecoins pegged to central bank fiat currencies and fully backed by liquid assets will be allowed. The new framework is part of a broader modernization of the financial system and is expected to take effect in 2026.

Bank of Canada Governor Tiff Macklem announced the move this week during a speech at the Montreal Chamber of Commerce. “We want stablecoins to be good money—just like banknotes or bank deposits,” he said.

Stablecoins must be fully backed 1:1

Under the proposal, every approved stablecoin must be backed one-to-one with a central bank currency and supported by high-quality liquid assets, such as government bonds or treasury bills.

The goal is to ensure that stablecoins function as reliable payment instruments without posing risks to users or the broader financial system. “The idea is to allow Canadians to benefit from stablecoin innovation—but safely,” Macklem emphasized.

The direction was also confirmed in Canada’s 2025 federal budget report, which outlines strict reserve requirements, clear redemption rules, robust risk management systems, and strong data protection standards for stablecoin issuers.

Stablecoins as a complement to the banking system

According to Lucas Matheson, head of Coinbase Canada, the new rules could fundamentally reshape everyday finance. Speaking to CBC, he said the regulation “will permanently change how Canadians interact with money and the internet.”

Canada’s approach aligns with a broader overhaul of its financial infrastructure, including the rollout of the Real-Time Rail payment system and the introduction of open banking.

Following the U.S., with Europe and Asia moving too

Canada’s regulatory push accelerated after the United States passed the GENIUS Act in July, one of the world’s most comprehensive stablecoin frameworks. The UK and Hong Kong have also made progress on similar regulations.

The stablecoin market is growing rapidly, with a current value of approximately $313.6 billion and projections suggesting it could reach $2 trillion by 2028.

No CBDC, but strict rules for stablecoins

Canada has opted not to issue a central bank digital currency (CBDC). Instead, the Bank of Canada is focusing on strict oversight of stablecoins, positioning them as a safe bridge between traditional money and the digital economy.

Sources:

https://www.youtube.com/watch?v=8vkU7xnGi4M

https://www.bankofcanada.ca/2025/12/good-money-and-your-central-bank/

https://www.cbc.ca/news/politics/government-crypto-currency-framework-9.6966615

https://www.coingecko.com/en/categories/stablecoins