Canada Budget Promises to Stablecoin Regulation Next Year

Canada will introduce legislation regulating fiat-backed stablecoins in its 2025 federal budget, following in the footsteps of the United States, which passed landmark stablecoin laws in July.

Stablecoin issuers will be required to maintain sufficient reserves, establish redemption policies and implement various risk management frameworks, including measures to protect personal and financial data, according to to the government’s 2025 budget published on Tuesday.

The Bank of Canada will allocate $10 million over two years, starting in the 2026-2027 fiscal year, to make sure everything runs smoothly, followed by an estimated $5 million in annual costs that will be offset by stablecoin issuers regulated by the Retail Payment Activities Act.

It comes almost four months after the United States passed Stablecoin Regulation GENIUS Act, which puts pressure on Canada to pass its own rules for tokens.

While the document did not specify when the legislation will be introduced, it is part of a broader plan to modernize payments and make digital transactions faster, cheaper and safer for the country’s 41.7 million people.

Coinbase Canada CEO Lucas Matheson is bullish on the proposal, and said CBC on Monday that will “change how Canadians interact with money and the internet forever.”

Institutional stablecoin adoption is growing

The stablecoin market currently he puts to $309.1 billion, with the US Treasury estimating in April that it would rise to $2 trillion by 2028.