Lead
Canada’s Fall Economic Statement formally directs the federal government to draft legislation for Canadian dollar-backed stablecoins, promising clear reserve, redemption and privacy standards while assigning the Bank of Canada a supervisory role. The move follows the U.S. GENIUS Act and positions Ottawa to close perceived regulatory gaps ahead of 2026 payments reforms. (CoinDesk, Budget 2025, Chapter 1)
What Ottawa Announced
- Budget 2025 commits to a national framework requiring fiat-backed stablecoin issuers to maintain fully backed reserves, implement redemption policies, and safeguard customer data.
- Oversight will fall to the Bank of Canada, aligning issuance with existing payments supervision and the Retail Payment Activities Act.
- Legislators signaled amendments to existing payments law to incorporate national-security safeguards for digital assets.
- The policy package aims to lower transaction costs for consumers and businesses while ensuring consistent disclosures across issuers. (2)
Industry Response
Canada’s Web3 Council and domestic custodians quickly welcomed the announcement, arguing that regulatory certainty will accelerate institutional participation in tokenized payments. Market participants also highlighted competitive pressure from U.S. and EU frameworks—particularly MiCA and the GENIUS Act—and framed Ottawa’s commitment as a catalyst for Canadian fintech innovation. Stablecoin infrastructure providers noted that clarity on reserve treatment could unlock banking partnerships that had been stalled during regulatory limbo.
What Comes Next
- Draft legislation will move through Parliament in 2025, with interim consultations on reserve reporting, redemption timelines and segregation of client assets.
- The Bank of Canada is expected to outline supervisory expectations for attestation frequency, disclosure templates and technology risk controls.
- Coordination with provincial securities regulators remains a priority to avoid overlapping guidance for tokenized securities and payments products.
- Policymakers must balance innovation goals with anti-money-laundering enforcement—particularly as crypto businesses lobby for harmonized rules across G7 markets.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Stakeholders should review forthcoming legislation and regulatory guidance directly.