The Canadian government has planted a flag committing to legislation that will regulate stablecoins backed by its dollar, following in the recent footsteps of its American neighbors who passed a new law to govern stablecoin issuers over the summer.
With the release of the 2025 budget on Tuesday, the government said it was focused on establishing clear standards for 1-1 reserves and would put 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 repurchase policies, implement risk management frameworks and protect the sensitive and personal information of Canadians,” according to the budget document released this week.
On the heels of new US legislation known as the National Stablecoin Innovation Guidance and Establishment Act in the United States (GENIUS), the Canadian development has been met with praise from crypto advocates.
The Web3 Council of Canada said it was “encouraged by the government’s commitment to enabling innovators to issue stablecoins, which will promote competition in Canada’s payments market and reduce transaction costs for consumers and businesses.”
The budget indicates that the government will need to make changes to the Retail Payment Activities Act. He also called for “national security guarantees” ensuring the safety of Canada’s financial system.
“Canada has fallen behind global standards in innovative technology and this is an excellent step forward [Minister of National Revenue] François-Philippe Champagne and [Prime Minister] Mark Carney to increase innovation in the financial sector,” said Didier Lavallée, CEO of Tetra Digital Group, which bills itself as Canada’s first fully regulated digital asset custodian and financial services provider. He added that the approach “sends a strong signal that stablecoins should be regulated as payment instruments and not as securities.”
Once the commitment is made, attention will shift to how it will be implemented.
“It’s great to see real progress,” Eric Richmond, Shakepay’s general counsel, said in a post on the social media site LinkedIn. “The focus now is on implementation: ensuring the framework remains open, proportionate and accessible, so fintech can help build the next generation of reliable payment pathways for Canadians. »
Read more: Tetra Digital raises $10 million to create a stablecoin regulated in Canadian dollars
