Canada Begins March Toward Stablecoin Regulations

The Canadian government has planted a flag committing to legislation that will regulate stablecoins backed by its dollar, following the recent steps of its American neighbors who passed a new law to govern stablecoin issuers there during the summer.

With the release of the 2025 budget On Tuesday, the government said it is focused on establishing clear standards for 1-1 reserves, and will put the administration of the effort in the hands of the Bank of Canada. “This legislation will require issuers to maintain and manage adequate asset reserves, establish redemption policies, implement risk management frameworks, and protect the sensitive and personal information of Canadians,” according to the budget document that emerged this week.

After the heels of the new US law known as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS), the Canadian development was greeted with praise by crypto advocates.

Canadian Council Web3 said it is “encouraged by the government’s commitment to allow innovators to issue stablecoins, which will promote competition in Canada’s payments market and reduce transaction costs for consumers and businesses.”

The budget indicated that the government will have to make amendments to the Retail Payment Activities Act. He also called for “national security guarantees” to ensure the safety of the Canadian financial system.

“Canada has fallen behind the global standard for this innovative technology and this is an excellent step forward [Minister of National Revenue] François-Philippe Champagne e [Prime Minister] Mark Carney to increase the innovation of the financial sector”, said Didier Lavallée, the CEO of Tetra Digital Group, which presents itself as the first fully regulated digital asset custodian and financial services provider of Canada. He added that the approach “sends a strong signal that stablecoins should be regulated as payment instruments and not as securities”.

With the associated commitment, the focus shifts to how to put yourself in place.

“It’s great to see real progress,” said Eric Richmond, Shakepay’s general counsel, in a statement post on the LinkedIn social media site. “Now the focus turns to implementation: ensuring that the framework remains open, proportionate and accessible, so fintechs can help build the next generation of trusted payment rails for Canadians.”

Read more: Tetra Digital raises $10 million to create Canadian Dollar regulated stablecoin