- Canada’s federal budget includes a new policy for stablecoins, supervised by the Bank of Canada.
- Issuers must hold one-to-one reserves in cash or high-quality liquid assets and allow immediate redemptions.
- Non-bank stablecoin issuers cannot offer interest or yield on stablecoins under the new rules.
- The policy aims to align with similar U.S. regulations on stablecoin issuance.
- Industry leaders suggest adjustments to enable faster market access and yield sharing.
The Canadian government passed its federal budget on Monday, introducing a policy for stablecoins regulated by the Bank of Canada. The policy sets requirements for stablecoin issuers, including maintaining reserves equivalent to the stablecoin value in either the reference currency or other high-quality liquid assets. Immediate redemption of stablecoins by holders will also be mandatory.
Stablecoins are digital tokens pegged to a stable asset like a currency, often designed to minimize volatility. This new Canadian policy closely mirrors U.S. rules for issuers of U.S. dollar-backed stablecoins.
Under the policy, issuers not classified as banks are prohibited from providing any form of interest or yield on stablecoin holdings, whether in cash, digital assets, or other forms. The Bank of Canada will also register and supervise authorized stablecoin issuers.
In a recent public appearance, Prime Minister Mark Carney was seen alongside Coinbase Canada CEO Lucas Matheson at the national football championship. Mr. Matheson described the policy as a “step in the right direction” but recommended an interim pathway to accelerate the launch of Canadian dollar–denominated stablecoins. He also advocated for allowing issuers to share yield on stablecoin deposits to enhance competitiveness.
The global market for stablecoins is largely dominated by tokens tied to the U.S. dollar. However, other countries and regions, including Europe, are working to boost issuance in their local currencies.
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