Canada’s 2025 Budget Puts Stablecoins in Regulatory Crosshairs - Following US Blueprint for Crypto Control
Ottawa draws regulatory lines around digital dollars as stablecoin framework enters federal budget.
The Framework Unfolds
Canada's finance ministry is building guardrails for stablecoin issuance and trading—mirroring the US approach that's been developing since 2022. The 2025 budget outlines requirements for reserve backing, redemption guarantees, and operational transparency that could make or break crypto-native payment systems.
Market Impact Assessment
Regulatory clarity typically boosts institutional participation while trimming volatility. Canadian dollar-pegged tokens face immediate compliance pressure, while global stablecoins must adapt their playbooks for northern exposure. Traditional banks eye the space with mixed interest—seeing both competition threat and custody opportunity.
Because nothing says financial innovation like making digital assets behave exactly like their analog predecessors. The budget implementation act reaches parliament this fall—watch where the compliance costs land.
Bank of Canada Allocates $10M to Oversee Stablecoin Rollout
The Bank of Canada is expected to spend $10 million over two years, starting in fiscal year 2026–2027, to oversee the rollout.
Annual supervision costs of about $5 million will later be recovered from issuers regulated under the Retail Payment Activities Act.
The MOVE comes just months after the US passed its GENIUS Act in July, a landmark stablecoin bill that heightened global regulatory momentum.
Ottawa’s response signals its intent to modernize payment systems while keeping pace with international developments.
Although the government has yet to specify when the bill will be introduced, the plan forms part of a wider effort to make digital transactions faster, cheaper, and more secure for Canada’s 41.7 million residents.
Coinbase Canada CEO Lucas Matheson welcomed the proposal, telling CBC that it could “change how Canadians interact with money and the internet forever.”
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
The global stablecoin market is currently valued at $309.1 billion, with the US Treasury projecting it could reach $2 trillion by 2028.
Institutional adoption is already accelerating, with Western Union, SWIFT, MoneyGram, and Zelle integrating or planning to integrate stablecoin-based solutions.
Among Canada’s emerging players is Tetra Digital, which recently raised $10 million from Shopify, Wealthsimple, and the National Bank of Canada to develop a Canadian dollar-backed stablecoin.
The push comes as the Bank of Canada shelved its central bank digital currency (CBDC) plans in September 2024, citing “no compelling case” to move forward.
Western Union to Launch Dollar-Backed Stablecoin on Solana
Western Union is also entering the stablecoin market with plans to launch the US Dollar Payment Token (USDPT) on the solana blockchain in the first half of 2026.
The token, issued by Anchorage Digital Bank, will allow users to move money globally with lower fees and faster settlement times, reducing reliance on traditional banking intermediaries and volatile currency conversions.
CEO Devin McGranahan described the move as a continuation of Western Union’s 175-year mission to simplify money transfers, this time through blockchain technology.
He said Solana was chosen for its speed, scalability, and low-cost transactions, which are crucial for the company’s high-volume remittance business.
By leveraging blockchain rails, Western Union aims to make remittances nearly instantaneous and more transparent.
