Canada to Regulate Stablecoins Under 2025 Budget Plan

Highlights:

• Canada plans new stablecoin rules to protect users and improve digital money safety.
• Bank of Canada will manage new rules, spending $10 million over two years.
• Experts say new laws could help Canada lead in faster, safer crypto payments.

Canada is preparing legislation to regulate fiat-backed stablecoins in its 2025 federal budget, following the United States, which passed major stablecoin rules in July. The initiative aims to strengthen oversight and protect users in the expanding digital currency sector. 

Canada Sets Stablecoin Rules to Strengthen Oversight and Modernize Payments

According to the 2025 budget released Tuesday, stablecoin companies must hold adequate reserves, set clear redemption policies, and adopt risk management frameworks that protect both personal and financial information. The Bank of Canada will spend $10 million in 2026–2027 to manage these rules. About $5 million each year will come from fees charged to the stablecoin companies.

The Canadian announcement follows the US GENIUS Act, passed almost four months ago, which regulates stablecoins. While the government did not give a specific timeline for introducing the legislation, the plan is part of a broader goal to modernize payments. The framework seeks to make transactions faster, more affordable, and more secure for Canada’s 41.7 million residents.

The Bank of Canada plans to follow international standards when rolling out the new regulations. Experts say adopting similar reserve and risk rules could boost crypto legitimacy and make cross-border stablecoin use faster and easier.

🇨🇦 Canada just made a big step forward.

Today’s federal budget includes new guidance on stablecoin regulation, signaling progress toward embracing faster, cheaper, and borderless payments.

With 60,000 advocates strong, Stand with Crypto Canada will continue to be a driving… pic.twitter.com/C0ZiO3GLsR

— Stand With Crypto Canada 🇨🇦 (@StandWCrypto_CA) November 4, 2025

Lucas Matheson, CEO of Coinbase Canada, said on Monday that the government’s move could show that Canada wants to lead in digital innovation. He suggested that this news might change how Canadians use money and the internet, making payments faster, cheaper, and easier.

As part of the plan to modernize payments, the Retail Payment Activities Act is expected to be updated to cover electronic payment providers using cash-backed stablecoins. Stablecoins are seen as easy to trade like major cryptocurrencies and less volatile, but some critics say they may lack the security tools banks use to prevent illegal financial activity.

Canada Urged to Update Stablecoin Rules After CBDC Plan Halted

Earlier, Canada had considered launching a central bank digital currency, but canceled the plan last September. Bank of Canada Governor Tiff Macklem said there was no strong reason to move forward at that time. 

Industry experts have asked the government to make rules for digital assets clearer and follow global trends. Last month, Ron Morrow from the Bank of Canada said Canada might fall behind in stablecoin rules and payment updates. He added that progress in Canada has been slow compared with countries like the UK, Australia, and the European Union, which have already made changes. Morrow said the government should think about new federal rules for stablecoins, similar to what other countries have done.

The stablecoin market now stands at over $309 billion, and the US Treasury expects it could grow to $2 trillion by 2028.

🇺🇸 US Treasury Secretary: "Stablecoins could reach $2 trillion by 2028"

During a hearing before the US Senate, Treasury Secretary Scott Bessent predicted that the market for dollar-backed stablecoins could surpass $2 trillion within three years.

The GENIUS Act, the stablecoin… pic.twitter.com/iLWYnYN3gU

— Atlas21 (@Atlas21_news) June 12, 2025

More companies are starting to use stablecoins, including Western Union, SWIFT, MoneyGram, and Zelle, with some already offering or planning solutions. Payments platform Tetra Digital is a major player in the Canadian market, raising $10 million to create a digital version of the Canadian dollar, backed by investments from Shopify, Wealthsimple, and the National Bank of Canada.