Ottawa follows Washington’s lead, pledging legal clarity for fiat-backed digital assets
Canada’s federal government is preparing to regulate fiat-backed stablecoins as part of its 2025 budget plan, marking a major step toward establishing a clear legal framework for digital assets. The move follows the United States’ passage of the GENIUS Act earlier this year — a landmark law that set new global standards for stablecoin oversight.
According to the newly released 2025 federal budget, the forthcoming legislation will require stablecoin issuers to maintain fully backed reserves, implement strict redemption and transparency policies, and adopt robust risk management frameworks. These measures are designed to protect both consumers and financial stability, while ensuring that digital payments remain secure and reliable.
The Bank of Canada will allocate $10 million over two years, beginning in fiscal 2026–2027, to oversee the rollout of the new regime. The budget also projects annual oversight costs of around $5 million, which will be covered through fees collected from regulated stablecoin issuers under the Retail Payment Activities Act.
The move positions Canada alongside the U.S. and the European Union, both of which have advanced frameworks to govern fiat-backed tokens and protect investors. The plan also comes amid Ottawa’s broader push to modernize payment systems, making transactions “faster, cheaper, and safer” for over 41 million Canadians.
Lucas Matheson, CEO of Coinbase Canada, welcomed the development, telling CBC that it will “change how Canadians interact with money and the internet forever.”
The global stablecoin market now exceeds $309 billion, with U.S. Treasury projections suggesting growth to $2 trillion by 2028. Major payment companies — including Western Union, SWIFT, MoneyGram, and Zelle — have all announced integration plans, underscoring institutional confidence in digital settlement systems.
Meanwhile, Tetra Digital, a Canadian fintech backed by Shopify, Wealthsimple, and the National Bank of Canada, has raised $10 million to build a digital Canadian dollar, signaling local industry readiness ahead of formal regulation.
Canada’s shift toward private-sector stablecoin regulation follows its decision to pause central bank digital currency (CBDC) plans in late 2024. At the time, Bank of Canada Governor Tiff Macklem said there was “no compelling case” to launch a state-backed digital dollar — a stance now evolving as market-driven innovation leads the way.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.