Canada Approves Budget That Advances Policy for Stablecoins

The Canadian government has successfully passed a budget in parliament that includes a new policy for regulating stablecoins. This new framework places the Bank of Canada in charge of overseeing stablecoin issuance. The legislation mandates that issuers maintain full reserves strictly composed of the reference currency or high-quality liquid assets while allowing for immediate redemptions. Additionally, the policy prohibits non-bank stablecoin issuers from offering any form of interest or yield to customers. Though this move is seen as a significant advancement, some industry leaders suggest refinements, including a faster route for CAD-denominated stablecoins to enter the market and the provision for issuers to share yields on stablecoin deposits. These recommendations aim to enhance Canada's competitive stance in the stablecoin ecosystem amid a market primarily dominated by U.S. dollar-backed tokens.

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