- The Canadian government plans to unveil stablecoin regulations to align with global digital asset standards.
- Canada has lagged behind its peers such as the U.S. in stablecoin regulation.
Canada is preparing to introduce a new stablecoin regulation, set to be announced in the upcoming federal budget on November 4, a report by Bloomberg reveals. Officials have been in intense discussion with regulators and industry leaders for weeks to develop a framework that modernizes Canada’s payment system.
This initiative comes after the United States passed the GENIUS Act, which established clear rules for fully collateralized, dollar-backed stablecoins, set to take effect in 2027.
Currently, Canada lacks a comprehensive legal structure for stablecoins. Some regulators have suggested that some tokens could qualify as securities or derivatives under existing laws.
The market for Canadian-dollar–pegged stablecoins such as QCAD remains limited. This is despite the popularity of U.S. dollar–pegged options, particularly USDC, in Canada, following the discontinuation of Tether’s USDt support in 2023.
See Related: Marathon Digital Bought Over $618M In Bitcoin In October And November
Why The Timing Of Regulation Matters
Introducing clear stablecoin regulation is crucial for Canada to maintain competitiveness in the evolving digital finance. Ron Morrow, Executive Director of Payments at the Bank of Canada, says it’s important that Canada works quickly and collaboratively to not fall behind its global peers in regulating stablecoins.
“The pace of change here in Canada has been – to use a kind word – gradual. Other major jurisdictions like the United Kingdom, Australia, and the European Union have already embraced changes in many areas,” Mr. Morrow said. “Clearly, there is a need to accelerate change within our own borders.”
Morrow emphasizes that establishing new rules will help Canadian consumers reap cryptocurrency’s benefits and be protected from credit and liquidity risks.
