Canada Approves Budget That Advances Policy for Stablecoins

The Canadian government has successfully passed a budget in Parliament that includes new regulations for stablecoins, with oversight by the Bank of Canada. This policy mandates that stablecoin issuers maintain one-to-one reserves comprised of either the reference currency or other high-quality liquid assets. Issuers are required to allow immediate redemptions and adhere to various regulations related to risk management, cybersecurity, and transparency. Notably, non-bank issuers are barred from providing any form of yield on stablecoin deposits. While Prime Minister Mark Carney's administration considers this a significant victory, some industry leaders, including Coinbase Canada's CEO, suggest revisions to enhance competitive viability for Canadian CAD-denominated stablecoins. They advocate for a faster market entry for these stablecoins as well as the ability to share yields with customers to boost Canada's standing in the global stablecoin landscape, which is currently dominated by U.S. dollar-backed tokens.

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