Canada to Regulate Stablecoins Under Bank of Canada Oversight, Aligning with U.S. Policy Moves

Canada is taking a significant step toward regulating Canadian dollar-backed stablecoins, signaling a major development for the nation’s digital asset industry. In its 2025 federal budget, the Canadian government announced plans to introduce legislation establishing clear regulatory standards for stablecoin issuers, following the recent U.S. GENIUS Act that set similar rules south of the border.

According to the budget, oversight of these digital assets will fall under the Bank of Canada, which will ensure that issuers maintain 1:1 reserve backing, transparent redemption policies, and strong risk management frameworks. The move also emphasizes data protection for Canadian consumers and includes “national security safeguards” to strengthen financial system integrity. The government will amend the Retail Payment Activities Act to support the framework.

The Canadian Web3 Council welcomed the initiative, calling it a critical step toward modernizing Canada’s payments ecosystem. “We’re encouraged by the government’s commitment to enabling stablecoin innovation, fostering competition, and reducing transaction costs for consumers and businesses,” the council stated.

Industry leaders echoed this optimism. Didier Lavallée, CEO of Tetra Digital Group, praised the move as an overdue advancement for Canada’s financial innovation, emphasizing that stablecoins should be regulated as payment instruments rather than securities. Similarly, Eric Richmond, general counsel at Shakepay, highlighted the importance of ensuring that the new framework remains open and accessible for fintech firms to build the “next generation of trusted payment rails” in Canada.

With this commitment, Canada positions itself closer to global standards for digital currency regulation, signaling a growing alignment between North American regulatory strategies and a broader acknowledgment of stablecoins’ role in the future of finance.