Canada plans to introduce national legislation to regulate fiat-backed stablecoins under its 2025 federal budget, marking a significant step toward aligning with the United States’ recently passed stablecoin laws.
According to the budget released on Tuesday, stablecoin issuers will need to maintain adequate reserves, establish redemption policies, and implement robust risk management frameworks — including measures to protect users’ financial and personal data.
Central Bank Oversight and Funding
The Bank of Canada will allocate $10 million over two years beginning in fiscal year 2026–2027 to ensure smooth implementation of the framework.
Ongoing annual costs of roughly $5 million will be covered by fees collected from stablecoin issuers regulated under the Retail Payment Activities Act.
This move follows the U.S. GENIUS Act, passed in July, which set new global standards for stablecoin oversight and placed pressure on Canada to develop similar regulations.
Part of Broader Digital Payments Modernization
While the budget did not specify when the bill will be introduced, the proposed framework forms part of a broader effort to modernize Canada’s payments landscape — making transactions faster, cheaper, and more secure for its 41.7 million citizens.
Coinbase Canada CEO Lucas Matheson welcomed the move, calling it transformative. “It would change how Canadians interact with money and the internet forever,” he told CBC.
Institutional Adoption of Stablecoins Accelerates
The global stablecoin market is valued at roughly $309 billion and is projected by the U.S. Treasury to reach $2 trillion by 2028.
Major financial institutions such as Western Union, SWIFT, MoneyGram, and Zelle have either integrated or announced plans to integrate stablecoin payment solutions.
Local Players Expand Digital Currency Initiatives
In Canada, fintech firm Tetra Digital has raised $10 million to develop a digital version of the Canadian dollar, backed by investments from Shopify, Wealthsimple, and the National Bank of Canada.
The initiative comes after the Bank of Canada scrapped its plans for a central bank digital currency in 2024, with Governor Tiff Macklem stating there was no compelling reason to proceed.
