Canada sets stablecoin rules in 2025 Federal budget
Canada’s 2025 federal budget introduces legislation for fiat‑backed stablecoins. Issuers would be required to hold adequate reserves and offer clear redemption rights. The Bank of Canada is designated to administer the regime, funded with $10 million retained from its remittances over 2026–27.
The plan outlines risk management standards and privacy protections for users. The government also intends to amend the Retail Payment Activities Act to bring payment service providers that use stablecoins under active oversight.
Ongoing administration is projected to cost about $5 million annually after the initial period, with expenses recovered through fees paid by regulated issuers.
“The legislation will also include national security safeguards to support the integrity of the framework so that fiat‑backed stablecoins are safe and secure for consumers and businesses to use,” according to the budget document.
Bloomberg reported that officials at the Department of Finance Canada and other agencies have held intensive talks over recent weeks with industry stakeholders and regulators on stablecoin regulation. The discussions focused on classifying stablecoins and on avoiding capital flight to U.S. dollar‑backed tokens; the budget paper did not disclose the government’s conclusions.
Canada’s plan aligns with a broader global push to regulate stablecoins. The United States adopted the GENIUS stablecoin act in July, Europe has implemented the Markets in Crypto‑Assets Regulation, and lawmakers in Japan and South Korea are advancing frameworks. As of Nov. 4, total stablecoin supply was about $291 billion, largely in U.S. dollar tokens. Standard Chartered estimates as much as $1 trillion could move from emerging‑market bank deposits into U.S. stablecoins by 2028.
As GNCrypto wrote previously, the Bank of Canada in September 2025 urged federal oversight of stablecoins due to rising domestic use and uneven protections. Executive Director Ron Morrow called for swift coordination across federal and provincial bodies. The Bank pointed to faster, cheaper transfers as potential benefits, while noting run risk, leveraged activity in decentralized finance, and spillovers to traditional markets, along with overlaps between payments and securities oversight.
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