Canada to Regulate Stablecoins After US Move

Canada is set to regulate fiat-backed stablecoins under its 2025 federal budget, marking a pivotal shift in how the country treats digital money. Issuers would be compelled to hold sufficient reserves, maintain clear and prompt redemption policies, and adopt robust risk-management frameworks that protect consumers’ personal and financial data. The initiative is part of a wider payments overhaul aimed at making digital transactions faster, cheaper, and more secure for Canada’s 41.7 million residents.

To roll out the framework, the Bank of Canada would receive $10 million over two years beginning in fiscal 2026–2027, followed by roughly $5 million in annual operating costs recovered from regulated firms under the Retail Payment Activities Act. While the budget did not set a date to table legislation, the move lands less than four months after the United States enacted its landmark GENIUS Act on stablecoins, intensifying pressure on peers to establish clear rules. Coinbase Canada CEO Lucas Matheson told CBC the proposal could transform how Canadians interact with money and the internet “forever.”

The timing tracks surging institutional interest in stablecoin rails. The market stands near $309.1 billion today, and the US Treasury projected in April that it could reach $2 trillion by 2028 if adoption keeps accelerating. Major payment networks and remittance brands including Western Union, SWIFT, MoneyGram, and Zelle have announced integrations or pilots in recent months, signaling that stablecoins are moving from crypto niche to mainstream infrastructure.

At home, Canada’s ecosystem is gathering momentum. Payments platform Tetra Digital raised $10 million to develop a digital Canadian-dollar instrument, backed by Shopify, Wealthsimple, and National Bank of Canada. The policy shift also follows Ottawa’s decision in September 2024 to shelve a central bank digital currency effort after Governor Tiff Macklem said a compelling case was lacking. For now, Canada appears poised to prioritize tightly supervised, privately issued stablecoins over a public CBDC while it modernizes the nation’s payment rails.