Canada Begins March Toward Stablecoin Regulations

In response to the U.S. GENIUS Act, Canadian lawmakers are initiating legislation for Canadian-dollar-backed stablecoins, highlighting the importance of regulatory clarity in this area. The government has announced plans in its Budget 2025 to implement a framework that will require stablecoin issuers to maintain adequate reserves, establish clear redemption policies, and create robust risk management frameworks to protect Canadian financial systems and consumers. The Bank of Canada will oversee these requirements, marking a significant step forward in regulating fiat-backed stablecoins. This initiative has been widely praised by crypto advocates, including the Canadian Web3 Council, which believes it will enhance competition in Canada’s payments market. The government also plans amendments to the Retail Payment Activities Act and will ensure the introduction of national security measures. As Canada looks to catch up with global standards for this innovative technology, the focus will now shift toward implementation and maintaining an open and accessible regulatory framework to support fintech innovation.

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