Canada Approves Budget That Advances Policy for Stablecoins

The Canadian government has successfully advanced a federal budget that includes a new policy governing stablecoins, managed by the Bank of Canada. This development represents a significant victory for Prime Minister Mark Carney's administration and aligns with recent regulations in the U.S. concerning stablecoin issuance. The proposed policy mandates that issuers maintain one-to-one reserves composed of high-quality liquid assets and allows for immediate redemptions while requiring adherence to various risk management and cybersecurity protocols. Additionally, non-bank stablecoin issuers will not be permitted to offer any yields on their stablecoins. The CEO of Coinbase Canada has suggested amendments to fast-track the market entry of CAD-denominated stablecoins, advocating for a competitive edge in the global market. As of now, the global stablecoin space is largely dominated by U.S. dollar-based tokens, prompting other regions, including the European Union, to seek more representation for their currencies.

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