Canada Moves to Regulate Stablecoins in New Budget

In its 2025 budget, Canada announced plans to regulate fiat-backed stablecoins, establishing a legal framework for their issuance and use. The government allocated $10 million over two years for the Bank of Canada to oversee these regulations. Current estimates suggest that stablecoins represent approximately 30% of all global crypto transactions, with volumes surpassing $4 trillion. The proposed legislation will require stablecoin issuers to manage adequate asset reserves, create redemption policies, implement risk management frameworks, and safeguard users' personal information. Furthermore, national security measures will be included to ensure the safety and security of these financial instruments for consumers and businesses. The Bank of Canada is to retain $10 million for administrative costs starting in 2026, with projected ongoing costs covered by fees from regulated issuers. This move positions Canada alongside jurisdictions like the U.S. and EU, which have taken steps to regulate stablecoins, aiming to modernize its payments infrastructure while addressing the risks associated with these digital assets.

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