Canada to Propose Stablecoin Rules in Upcoming Federal Budget

Officials have held discussions with regulators and industry players in recent weeks to develop the proposed framework. Currently, Canada does not have a comprehensive legal system for stablecoins, though some tokens may already be classified as securities or derivatives under existing laws.

The market for Canadian dollar–pegged stablecoins remains small, with the main example being QCAD, a token fully backed 1:1 by the Canadian dollar and issued by Toronto-based Stablecorp. In contrast, U.S. dollar–pegged stablecoins, such as USDC, are more widely used in Canada, especially after Tether discontinued support for its USDt token in 2023.

The Bank of Canada has urged the government to establish clearer rules for stablecoins to support the modernization of the payment system and avoid falling behind other countries. “Governments are moving to regulate stablecoins and other cryptocurrencies so consumers can reap their benefits and be protected from credit and liquidity risks,” said Ron Morrow, who oversees payments and oversight at the Bank of Canada.

In the U.S., lawmakers passed the GENIUS Act in June, setting a regulatory framework for fully collateralized, dollar-backed stablecoins. This legislation includes requirements for anti–money laundering safeguards and regular audits, with the rules effective starting January 2027. Since the law’s passage, interest in the stablecoin market has grown, with the total value of U.S. dollar–pegged stablecoins surpassing $300 billion.