- Canada will introduce legislation regulating fiat-backed stablecoins in its 2025 federal budget.
- Stablecoin issuers must hold adequate reserves, provide redemption policies, and implement risk management plans.
- The Bank of Canada will receive $10 million over two years starting in the 2026-2027 fiscal year to support regulation efforts.
- Institutional adoption of stablecoins is growing, with major payment firms integrating these solutions.
- Canada has postponed plans for a central bank digital currency, focusing instead on stablecoin regulation.
Canada plans to enact laws regulating fiat-backed stablecoins as part of its 2025 federal budget. The legislation will require stablecoin issuers to maintain sufficient reserves, establish clear redemption policies, and adopt risk management measures that protect personal and financial information.
The Bank of Canada will receive approximately $7.6 million USD over two years starting in fiscal 2026-2027 to manage the implementation of the new regulations. An estimated $3.8 million USD will be required annually afterward, with costs to be recouped from stablecoin issuers under the Retail Payment Activities Act.
The stablecoin market currently holds about $309 billion USD in value and is projected to grow to $2 trillion USD by 2028 according to U.S. Treasury estimates. Institutional entities like Western Union, SWIFT, MoneyGram, and Zelle have started adopting or planning to adopt stablecoin technology for faster, cheaper payments.
Coinbase Canada CEO, Lucas Matheson, said the move will “change how Canadians interact with money and the internet forever.” Meanwhile, Tetra Digital, a leading Canadian stablecoin developer backed by Shopify, Wealthsimple, and National Bank of Canada, recently raised $10 million USD to develop a digital version of the Canadian dollar. This shift comes as Canada has delayed its central bank digital currency launch, with the Bank of Canada Governor stating there is no immediate need to move forward.
For more details, see the 2025 federal budget.
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