Canada is taking a big step toward regulating cryptocurrencies by addressing fiat-backed stablecoins under its 2025 federal budget, signaling a strategic move to align its digital asset policy with the U.S. GENIUS Act.
The new framework represents the country's first comprehensive approach to monitoring stablecoins, with a focus on transparency, protection of reserves and financial stability.
According to official budget documents released on November 4, the legislation will require stablecoin issuers to maintain full asset reserves, establish 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 widespread globally.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Bank of Canada spends $10 million on oversight
The Bank of Canada will allocate $10 million over two years, starting in 2026-2027, to implement and oversee the new regulatory framework. Annual costs of approximately $5 million will later be recovered from issuers licensed under the Retail Payment Activities Act (RPAA).
The initiative follows Ottawa's decision in 2024 to suspend its central bank digital currency (CBDC) project, shifting focus to private sector innovation under strict oversight.
Regulators say the framework will ensure that stablecoins used for payments meet national security and anti-fraud standards, and are integrated into existing financial infrastructure.
Industry figures such as Lucas Matheson, CEO of Coinbase Canada, have welcomed the proposal, calling it “a transformative moment that could redefine how Canadians interact with money and the internet.”
Canada is in line with global encryption standards
By mirroring the US GENIUS Act and the EU MiCA regulations, Canada seeks to be part of the global leaders in responsible cryptocurrency adoption. This decision comes at a time when the $314 billion stablecoin market is growing rapidly, with expectations indicating that it could exceed $2 trillion by 2028.
Local players, such as Shopify-backed Tetra Digital, Wealthsimple, and the National Bank of Canada, are developing stablecoins backed by the Canadian dollar, while global companies, including Western Union, are preparing to launch their own Solana-based digital currencies in 2026.
Analysts believe Canada's new rules could bridge the gap between innovation and trust, ensuring stablecoins become a safe and regulated part of the country's digital finance future.
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