🇨🇦 Canada to Regulate Stablecoins in 2025 Federal Budget — $10 Million Allocated to Bank of Canada
In a major step toward digital finance reform, Canada has officially included stablecoin regulations as part of its 2025 federal budget, signaling a commitment to fostering innovation while ensuring financial stability.
According to the budget released on November 4, the government plans to introduce a new legislative framework for fiat-backed stablecoins. The law will set clear rules for issuance, redemption, and oversight, ensuring these digital assets are secure, transparent, and fully backed by reserves.
The Bank of Canada will oversee the system, with $10 million allocated over two years starting in 2026 to administer the framework. Annual costs of around $5 million will later be recovered from regulated stablecoin issuers.
The new rules aim to protect consumers, strengthen financial integrity, and safeguard national security, ensuring that stablecoins can safely integrate into Canada’s broader payment ecosystem.
To make this possible, the government will amend the Retail Payment Activities Act (RPAA) — giving regulators authority over payment service providers that use stablecoins for transactions.
Interestingly, this move comes after Canada abandoned plans for a central bank digital currency (CBDC) in 2024. Instead, policymakers have decided to focus on private sector-led innovation — like stablecoins — to modernize payments and keep pace with global trends.
Officials warn that Canada risks falling behind other jurisdictions like the U.K., Australia, and the EU, which have already rolled out digital asset frameworks.
As part of broader reforms, the Crypto-Asset Reporting Framework — set to take effect in 2026 — will also require crypto service providers to report transaction and client data to tax authorities.
In short, Canada is betting on stablecoins, not a CBDC, to drive its next wave of financial modernization — and this new legal framework could set the tone for how advanced economies handle digital money going forward.
