Canada Moves to Regulate Stablecoins, Aligning With U.S. Crypto Policy Shift

Canada is taking a major step toward with its crypto regulation by tackling fiat-backed stablecoins under its 2025 federal budget, signaling a strategic move to align its digital asset policy with the United States’ GENIUS Act. The new framework marks the nation’s first comprehensive approach to stablecoin oversight, emphasizing transparency, reserve protection, and financial stability. According to official budget documents released on November 4, the legislation will mandate that stablecoin issuers maintain full asset reserves, create clear redemption policies, and adopt robust data protection and risk management systems. The plan aims to boost consumer confidence and modernize Canada’s payment ecosystem as digital currencies become more mainstream globally. Bank of Canada to Spend $10 Million on Oversight The Bank of Canada will allocate $10 million over two years, starting in 2026–2027, to implement and supervise the new regulatory framework. Annual costs of approximately $5 million will later be recovered from licensed issuers under the Retail Payment Activities Act (RPAA). This initiative follows Ottawa’s decision in 2024 to shelve its central bank digital currency (CBDC) project, shifting focus to private-sector innovation under strict oversight. Regulators say the framework will ensure stablecoins used for payments meet national security and anti-fraud standards, integrating them into the existing financial infrastructure. Industry figures such as Coinbase Canada CEO Lucas Matheson have welcomed the proposal, calling it a “transformational moment that could redefine how Canadians interact with money and the internet.” Canada Aligns With Global Crypto Standards By mirroring the U.S. GENIUS Act and the EU’s MiCA regulations, Canada seeks to be part of global leaders in responsible crypto adoption. The decision comes as the $314 billion stablecoin market grows rapidly, with projections suggesting it could surpass $2 trillion by 2028. Local players, such as Tetra Digital, backed by Shopify, Wealthsimple, and the National Bank of Canada, are already developing Canadian dollar–backed stablecoins, while global firms, including Western Union, prepare to launch their own Solana-based tokens in 2026. Analysts believe Canada’s new rules could bridge the gap between innovation and trust, ensuring that stablecoins become a secure and regulated part of the nation’s digital finance future. Cover image from ChatGPT, BTCUSD chart from Tradingview