Canada has announced a major step toward regulating stablecoins – cryptocurrencies pegged to real-world currencies such as the U.S. or Canadian dollar. As part of its 2025 federal budget, the government introduced a plan requiring stablecoin issuers to maintain sufficient reserves, implement robust risk management policies, and protect users’ personal and financial data.

The new legislation follows the U.S. decision in July to pass the groundbreaking GENIUS Act, which set clear rules for stablecoins in the American market. Canada is thus responding to growing international pressure and the rapidly expanding role of digital assets in the global financial system.

Stricter rules and central bank oversight

According to the government document, stablecoin issuers will be required not only to hold adequate reserves but also to offer transparent redemption policies and implement advanced risk management frameworks. The goal is to increase user safety and strengthen confidence in digital payments.

The Bank of Canada will allocate $10 million to ensure the smooth operation of the new framework during 2026–2027, followed by an estimated $5 million in annual costs. These expenses will be offset by fees from regulated stablecoin issuers under the Retail Payment Activities Act.

Canada aims to modernize its payment ecosystem

Stablecoin regulation is part of a broader effort to modernize the country’s payment system, making digital transactions faster, cheaper, and more secure for over 41 million Canadians. While the government has not yet announced when the bill will be tabled, experts expect it to become one of next year’s legislative priorities.

Institutional adoption of stablecoins grows

The global stablecoin market currently stands at $309 billion, with the U.S. Treasury estimating it could reach $2 trillion by 2028. Major players such as Western Union, SWIFT, MoneyGram, and Zelle are already integrating or planning to integrate stablecoin-based solutions.

In Canada, fintech Tetra Digital is emerging as a leader after securing $10 million in funding from Shopify, Wealthsimple, and the National Bank of Canada to develop a digital version of the Canadian dollar.

Central bank digital currency? Not yet

Interestingly, Canada’s move to regulate stablecoins comes shortly after it scrapped plans to issue its own central bank digital currency (CBDC). Bank of Canada Governor Tiff Macklem stated last September that the country “does not yet have a compelling case for introducing a digital dollar.”

Sources:

https://budget.canada.ca/2025/report-rapport/pdf/budget-2025.pdf

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

https://home.treasury.gov/system/files/221/TBACCharge2Q22025.pdf

https://x.com/ecb/status/1984214157743292520