Canada Introduces National Stablecoin Regulations Following U.S. Lead

Canada's 2025 federal budget unveils a sweeping regulatory framework for fiat-backed stablecoins, signaling a pivotal shift toward formal oversight of digital assets. The legislation mandates reserve requirements, redemption mechanisms, and robust risk management protocols for issuers, coupled with stringent data protection measures.

The Bank of Canada will allocate $10 million from 2026–27 to implement the framework, transitioning to an industry-funded model with $5 million annual fees. Amendments to the Retail Payment Activities Act will extend supervision to stablecoin payment processors, balancing innovation with consumer safeguards.

Behind closed doors, the Department of Finance has engaged in urgent consultations with crypto firms about stablecoin classification and capital flight risks—though deliberations remain undisclosed. This move aligns Canada with a global wave of crypto regulation, mirroring U.S. policy trajectories.